The 3akl motorcycle deaier in the Minneapolls-3t. Paul ares wants to make an acc
ID: 3145238 • Letter: T
Question
The 3akl motorcycle deaier in the Minneapolls-3t. Paul ares wants to make an accurate forecast of demand for the akl Super Tixl motorcycie during the next month. Because the manufacturer Motoroyole Sales January April August a. Compute a 3-month moving average forecast of demand for Aprl through January (of the next year b. Compute a s-month maving average forecast for June through January. C. Compare the two forecats computed In (a) and (b), uing MAD. Which one shouild the dese use for January of the next year?Explanation / Answer
MAD is given by sum of Absolute deviation divided by count of readings.
Since MAD is less for 3 month moving average forecast, thus the dealer should use the 3 month moving average forecast.
Month Motorcycle Sales 3 month moving average Absolute Deviation 5 month moving average Absolute Deviation Jan 9 Feb 7 Mar 10 Apr 8 9 1 May 7 8 1 Jun 12 8 4 8 5 Jul 10 9 1 9 8 Aug 11 10 1 9 8 Sep 12 11 1 10 9 Oct 10 11 1 10 9 Nov 14 11 3 11 8 Dec 16 12 4 11 7 Jan 13 13 17 54 MAD 2 8MAD is given by sum of Absolute deviation divided by count of readings.
Since MAD is less for 3 month moving average forecast, thus the dealer should use the 3 month moving average forecast.
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