# Garish Motors sells new and used automobiles. Sales of new cars over the past 50 weeks are given in the

## Question:

Garish Motors sells new and used automobiles. Sales of new cars over the past 50 weeks are given in the following table (week 50 is the most recent).

a. Compute a forecast for sales next week by using a 4-week moving average. What is the forecast? What is the MSE for the last five observations?

b. Can you reduce the MSE for the last five observations by changing the moving-average window? (Try 5- to 10-week windows.)

c. Compute a forecast for sales next week by using exponential smoothing with Î± = 0.25. What is the forecast? What is the MSE for the last five observations?

d. Can you improve the MSE for the last five observations by changing the smoothing constant Î±?

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**Related Book For**

## Management Science The Art of Modeling with Spreadsheets

**ISBN:** 978-1118582695

4th edition

**Authors:** Stephen G. Powell, Kenneth R. Baker

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