(PLEASE SHOW ALL WORK)After graduating from college, you and your freinds start

Question

(PLEASE SHOW ALL WORK)After graduating from college, you and your freinds start selling birdhouses made from recycled plastic. The idea has caught on. as shown by the following sales figures

A. Prepare forecast for june through september by using three-period moving average model.(SHOW WORK)

B. prepare forecast for june through september by using an experiment smoothing model with =0.5. Assume that the forecast for may was 2,000.(SHOW WORK)

C. Prepare forecast for june through september by using an adjusted exponential smoothing model with =0.5 and = 0.3. Assume that the unadjusted forecast (Ft) for may was 2,000 and the trend factor (Tt) for may was 700.(SHOW WORK)

month demand March 220 April 2,240 May 1,790 june 4,270 July 3,530 August 4,990

Explanation / Answer

(a)

Forecast for june = Demand for march + april + may / 3 = 220 + 2240 + 1790 /3 = 1416.66 = 1417

(b)

Forecast for June = Forecast for May + (Alpha * ( Actual Demand for may - Forecast for may)

= 2000 + (0.5 * -210) =2000 - 105 = 1895

(c)

Unadjusted Forecast for June = (Alpha * Demand for May) + ((1 - alpha) * Forecast for May)

= (0.5 * 1790) + (0.5 * 2000) = 895 + 1000 = 1895

Trend for june = (Beta * ( Forecast for June - Forecast for May)) + ((1 - Beta) * Trend for May)

= 0.3 * ( 1895 - 2000) + (0.7 * 700) = -31.5 + 490 = 458.5

Forecast for June using Adjusted exponential smoothing = Unadjusted Forecast for June + Trend for june

= 1895 + 458.5 = 2353.5

month demand Forecast March 220 April 2,240 May 1,790 june 4,270 1,417 July 3,530 2,767 August 4,990 3,197 September 4,263

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