A firm experienced the demand shown in the following table.

a. Fill in the table by preparing forecasts based on a five-year moving average, a three-year moving average, and exponential smoothing (with a w = 0.9 and a w = 0.3). The exponential smoothing forecasts may be begun by assuming Ŷt+1 = Yt.
b. Using the forecasts from 2005 through 2009, compare the accuracy of each of the forecasting methods based on the RMSE criterion.
c. Which forecast would you have used for 2010?Why?

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5-YEAR 3- YEAR EXPONENTIAL EXPONENTIAL ACTUAL MOVING MOVING SMOOTHING SMO0THING (W 0.9) (w = 0.3) YEAR DEMAND AVERAGE AVERAGE 2000 2001 2002 2003 2004 2005 2006 800 925 900 1025 1150 1160 1200 1150 1270 1290 2008 2009 2010 Unknown future value to be forecast.