Determine if each forecasting process is in control

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Jim's department at a local department store has tracked the sales of a product over the last ten weeks. It decides that the forecast demand uses two methods: 1) an exponential smoothing with an alpha of 0.3, 3 and an initial forecast of 28.0 for period 1; 2) a three-period weighted moving average with weights 0.5, 0.3, and 0.2 (from the latest period to the oldest period). Period Demand 1 24 2 23 3 26 4 36 5 26 6 30 7 32 8 26 9 25 10 28 a. Use demand forecasts from week 4 to week 10 to calculate the MSE and MAD for each forecast. Does one forecast seem superior? Explain. b. Calculate 2s control limits for each forecast, plot control charts, and determine if each forecasting process is in control. Explain.

Reference no: EM132277374

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