Calculate forecast using exponential smoothing method

Assignment Help Operation Management

Reference no: EM132089751

Pricilla Phranklin opened her new clothing store, Pricilla Phashions, in downtown Dover. Pants, skirts, blouses, and shirts have fairly consistent sales, while things like shorts, sweater and outerwear are highly seasonal. On the other hand, dresses are a little harder to predict. Pricilla is hiring you to arrive at the best forecasting method for dresses.

The following table contains three years of dress sales data:

Year 1 Year 2 Year 3

Month Demand Demand Demand

Jan 155 181 177

Feb 185 183 204

Mar 183 199 210

Apr 297 302 313

May 600 606 631

Jun 306 313 337

Jul 283 284 295

Aug 244 242 270

Sep 254 247 282

Oct 500 500 515

Nov 271 265 297

Dec 566 590 594

Total 3844 3912 4125

Using the dress data above, calculate the following:

1. Using years 2 and 3 data forecast year 3 using a simple 3 period moving average.

2. Using years 2 and 3 data forecast year 3 Calculate a forecast using the exponential smoothing method. Assume α = 0.20.

3. (a) Using the information you have for years 1 & 2, calculate a monthly index. And then (b)Using year 1 and 2 data Determine the slope and intercept of line equation using linear regression. Then calculate the new annual demand and forecast the monthly demand.

4. Using the actual Year-3 numbers to check your forecast accuracy, by using the forecasting error to calculate CFE, MSE, MAD, MAPE, and the tracking signal.

5. Finally, you are to indicate which forecasting technique is best and do an analysis of the shortcoming of each forecasting method, as indicated by the forecasting errors.

Reference no: EM132089751

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