Burger Lover Restaurant forecasts weekly sales of cheeseburgers. Cheeseburger We

Question

Burger Lover Restaurant forecasts weekly sales of cheeseburgers. Cheeseburger Week Salers 357 342 366 322 Based on historical observations over the past five weeks, make a forecast for the next period using the following methods: simple average, three-period moving average, and exponential smoothing with a-0.2,given a forecast of 327 cheeseburgers for the fifth week. Round your answers to 2 decimal places, the tolerance is +7-0.01 Simple average: F6- 348 3-Period moving average: Fo 347 Exponential smoothing: F6 332.20

Explanation / Answer

1) Simple average F6 = (357+342+366+322+353)/5 = 348

2) 3-period moving average, F6 = (366+322+353)/3 = 347

3) Exponential smoothing, F6 = 327 + (353-327)*0.2 = 332.20

4) MAD (Simple average) = |368-348| = 20

5) MAD (3-period moving average) = |368-347| = 21

6) MAD (Exponential smoothing) = |368-332.2| = 35.8

7) Simple average provides the lowest MAD

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