A motorcycle dealer in the Ottawa area wants to be able to accurately forecast the demand for

Question:

A motorcycle dealer in the Ottawa area wants to be able to accurately forecast the demand for the Super Hog motorcycle during the next month. From sales records, the dealer has accumulated the data in the following table for the past year.

Month Motorcycle Sales

January .............................................................. 9

February ............................................................ 7

March ................................................................ 10

April ................................................................... 8

May ................................................................... 7

June ................................................................. 12

July .................................................................. 10

August ............................................................. 11

September ...................................................... 12

October ........................................................... 10

November ....................................................... 14

December ....................................................... 16

a. Compute a three-month moving average forecast of demand for April through January (of the next year).
b. Compute a fi ve-month moving average forecast for June through January.

c. Compare the two forecasts computed in parts (a) and (b) using MAD. Which one should the dealer use for January of the next year?

Dealer
A dealer in the securities market is an individual or firm who stands ready and willing to buy a security for its own account (at its bid price) or sell from its own account (at its ask price). A dealer seeks to profit from the spread between the...

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