Question: A local retailer is thinking of using exponential smoothing to forecast one of his well-selling products. His problem is that he is not sure if

A local retailer is thinking of using exponential smoothing to forecast one of his well-selling products. His problem is that he is not sure if he should use a low or a high value of a. For this reason, he uses the historical data available and tries with values for a = 0.1 and a = 0.2 to find which value for a will give a smaller MAD. What are the MAD values he would arrive at?

WEEK 1 2 3 4 5 6 7 8 00 9 10

WEEK 1 2 3 4 5 6 7 8 00 9 10 11 ACTUAL SALES 95 110 120 98 112 95 105 130 70 80 110

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Answer Finding the prediction values for 01 and 02 will be followed by calculating the MAD for both forecast values as shown in the table below Week A... View full answer

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