Question

City Cycles has just started selling the new Z-10 mountain bike, with monthly sales as shown in the table. First, co-owner Amit wants to forecast by exponential smoothing by initially setting February’s forecast equal k January’s sales with α = .1. Co-owner
Barbara wants to use a three-period moving average.


(a) Is there a strong linear trend in sales over time?
(b) Fill in the table with what Amit and Barbara each forecast for May and the earlier months, as relevant.
(c) Assume that May’s actual sales figure turns out to be 405. Complete the table’s columns and then calculate the mean absolute deviation for both Amit’s and Barbara’s methods.
(d) Based on these calculations, which method seems more accurate?


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  • CreatedJuly 15, 2013
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