Reference no: EM133040322
Suppose you are the manager of a company trying to determine what forecasting method to use. Based upon the following historical data, calculate the following forecasts and specify what procedure you would utilize.
Actual Month Demand
1 63
2 65
3 67
4 70
5 71
6 73
-Calculate the simple 3-month moving average forecast for periods 4-6.
-Calculate the weighted 3-month moving average using weights of 0.50, 0.30, and 0.20 for periods 4-6.
-Calculate the single exponential smoothing forecast for periods 2-6 using an initial forecast (F1) 61, and an a of 0.30.
-Calculate the exponential smoothing with trend component forecast for periods 2-6 using an initial trend forecast (T1) of 1.8, and initial exponential smoothing forecast (S1) of 60 an a of 0.30 and a b of 0.30.
-Calculate the Mean Absolute Deviation (MAD) for the forecasts made by above each technique in periods 4-6. Which forecasting method do you prefer according to the MAD measure? Using your preferred technique forecast the demands for the following 2 months (months 7-8).