Observed monthly sales of a popular brand tennis shoe at a medium sized sports s
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Question
Observed monthly sales of a popular brand tennis shoe at a medium sized sports store at the towns mall over the first eight months of the year are given in the following table. These are new figures please show all work to get result and answers. Problem6 Chapter 8: Observed monthly sales of a popular brand tennis shoe at a medium-sized sports store at the town's mall over the first eight months of the year are given in the following table. Month Jan Feb Mar Apr May June July Aug 30 28 30 33 35 38 36 40 Demand a) Use a three-month moving average method to forecast the sales for the months April through September. Also compute the mean squared error (MSE) based on the sales and forecasts for months April through August. b) If the forecast for January was 28, determine the forecast for sales for the months February through September using an exponential smoothing method with -0.60. Also compute the mean squared error (MSE) based on the sales and forecasts for months April through August. c) Which method would you recommend based on MSE? Why?Explanation / Answer
a) for 3 month moving average forecast =average of last 3 month actual value
hence
b)
for exponential smoothing forecast =alpha*last month actual+(1-alpha)*last month forecast
c) we should prefer exponential smoothing forecast cause it has lowest MSE>
month demand(A) Forecast(F) (A-F)2 Jan 30 Feb 28 Mar 30 Apr 33 29.333 13.444 May 35 30.333 21.778 Jun 38 32.667 28.444 Jul 36 35.333 0.444 Aug 40 36.333 13.444 Sep 38.000 total 77.556 MSE =total/5 15.511Related Questions
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