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The management team of a new leisure facility have decided to look at the level of usage since it opened 11 weeks ago. They have been given the following figures:
You have been asked to advise on the use of the following forecasting methods:
? The naïve;
? A four-week moving average;
? A simple exponential smoothing model with a = 0.2 and a start forecast for week one of 150 (from market research).
a. Show how each of these three forecasting methods work using the given data. Predict the usage in week 12 using each method.
b. Compare the three forecasting methods by calculating:
? The bias;
? Mean squared error;
For each forecasting method and comment on your results.
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