Consider monthly demand for the ABC Corporation as shown in Table 7-3. Forecast the monthly demand...

Transcribed Image Text:

Consider monthly demand for the ABC Corporation as shown in Table 7-3. Forecast the monthly demand for Year 6 using moving average, simple exponential smoothing, Holt's model, and Winter's model. In each case, evaluate the bias, TS, MAD, MAPE, and MSE. Which forecasting method do you prefer? Why? TABLE 7-3 Monthly Demand for ABC Corporation Sales Year 1 Year 2 2,000 3,000 3,000 3,000 4,000 6,000 7,000 6,000 10,000 12,000 14,000 8,000 78,000 January February March April May June July August September October November December Total 3,000 4,000 3,000 5,000 5,000 8,000 3,000 8,000 12,000 12,000 16,000 10,000 89,000 Year 3 2,000 5,000 5,000 3,000 4,000 6,000 7,000 10,000 15,000 15,000 18,000 8,000 98,000 Year 4 5,000 4,000 4,000 2,000 5,000 7,000 10,000 14,000 16,000 16,000 20,000 12,000 115,000 Year 5 5,000 2,000 3,000 2,000 7,000 6,000 8,000 10,000 20,000 20,000 22,000 8,000 113,000 Consider monthly demand for the ABC Corporation as shown in Table 7-3. Forecast the monthly demand for Year 6 using moving average, simple exponential smoothing, Holt's model, and Winter's model. In each case, evaluate the bias, TS, MAD, MAPE, and MSE. Which forecasting method do you prefer? Why? TABLE 7-3 Monthly Demand for ABC Corporation Sales Year 1 Year 2 2,000 3,000 3,000 3,000 4,000 6,000 7,000 6,000 10,000 12,000 14,000 8,000 78,000 January February March April May June July August September October November December Total 3,000 4,000 3,000 5,000 5,000 8,000 3,000 8,000 12,000 12,000 16,000 10,000 89,000 Year 3 2,000 5,000 5,000 3,000 4,000 6,000 7,000 10,000 15,000 15,000 18,000 8,000 98,000 Year 4 5,000 4,000 4,000 2,000 5,000 7,000 10,000 14,000 16,000 16,000 20,000 12,000 115,000 Year 5 5,000 2,000 3,000 2,000 7,000 6,000 8,000 10,000 20,000 20,000 22,000 8,000 113,000

Answer rating: 100% (QA)

Solution To forecast the monthly demand for Year 6 using moving average simple exponential smoothing Holts model and Winters model we first need to calculate the historical data for the first 5 years ... View the full answer