Your manager is trying to determine what forecasting method to use. Based upon t
ID: 448910 • Letter: Y
Question
Your manager is trying to determine what forecasting method to use. Based upon the following historical data, calculate the following forecast and specify what procedure you would utilize.
MONTH
ACTUAL
DEMAND
1
62
2
63
3
66
4
65
5
73
6
68
7
74
8
75
9
75
10
82
11
86
12
85
a.
Calculate the simple three-month moving average forecast for periods 4–12. (Round your answers to 3 decimal places.)
Month
Three-Month Moving Average
4
5
6
7
8
9
10
11
12
b.
Calculate the weighted three-month moving average for periods 4–12 using weights of 0.50 (for the period t1); 0.30 (for the period t2), and 0.20 (for the period t3). (Do not round intermediate calculations. Round your answers to 1 decimal place.)
Month
Three-Month Weighted Moving Average
4
5
6
7
8
9
10
11
12
c.
Calculate the single exponential smoothing forecast for periods 2–12 using an initial forecast (F1) of 65 and an of 0.40. (Do not round intermediate calculations. Round your answers to 3 decimal places.)
Month
Single Exponential Smoothing Forecast
2
3
4
5
6
7
8
9
10
11
12
d.
Calculate the exponential smoothing with trend component forecast for periods 2–12 using an initial trend forecast (T1) of 1.80, an initial exponential smoothing forecast (F1) of 64, an of 0.40, and a of 0.30. (Do not round intermediate calculations. Round your answers to 3 decimal places.)
Month
Exponential Smoothing with Trend
2
3
4
5
6
7
8
9
10
11
12
e-1.
Calculate the mean absolute deviation (MAD) for the forecasts made by each technique in periods 4–12. (Do not round intermediate calculations. Round your answers to 3 decimal places.)
Mean Absolute
Deviation
Three-month moving average
Three-month weighted moving average
Single exponential smoothing forecast
Exponential smoothing with trend
e-2.
Which forecasting method do you prefer?
Exponential smoothing with trend forecast
Single exponential smoothing forecast
Three-month weighted moving average
Three-month moving average
Your manager is trying to determine what forecasting method to use. Based upon the following historical data, calculate the following forecast and specify what procedure you would utilize.
Explanation / Answer
Month Demand 3 Month Moving Average 1 62 2 63 3 66 4 65 (66+65+73)/3 68 5 73 (65+73+68)/3 68.66666667 6 68 (73+68+74)/3 71.66666667 7 74 (68+74+75)/3 72.33333333 8 75 (74+75+75)/3 74.66666667 9 75 (75+75+82)/3 77.33333333 10 82 (75+82+86)/3 81 11 86 (82+86+85)/3 84.33333333 12 85
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