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Forecasting Methods:Moving Average and Exponential Smoothing
The K&M company has the following historical sales data:
Year Sales2001 $200,0002002 $300,0002003 $270,0002004 $280,0002005 $320,000
1) Using the moving average method, predict sales for 2006 using the data for all of the years provided.
2) Using the exponential smoothing and that data for all of the years provided, predict sales for 2006. Assume that the most recent years are the most representative of future sales. In other words, 2005 is more representative of future sales than 2004, that 2004 is more representative than 2003, etc.
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