The spreadsheet provides data for the past 30 weeks of sales for product X. Based on the

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Question:

The spreadsheet provides data for the past 30 weeks of sales for product X. Based on the data, do the following questions.

(a) Plot the data. Just by looking at the plot, do you think a 3-week simple moving average would be a better forecast, or a 6-week simple moving average? Just by looking at the plot, do you think an exponential smoothing with value of α = 0.2 would be a better forecast or would α = 0.6 be better? Explain your reasoning. (Different people could reach different conclusions, but you need to give good reasons for your conclusions.)

(b) Compute the four possible forecasts: 3-week and 6-week simple moving average and exponential smoothing with value of α = 0.2 and α = 0.6. For exponential smoothing, use F1 = 600 (the forecast for week 1) for initialization. Based on your calculation, which one of the above four forecasts is the best? Justify your answer by calculating MAD.

Week	Actual Sales
1	574
2	1004
3	717
4	1076
5	1076
6	932
7	1291
8	1219
9	932
10	1219
11	1219
12	1076
13	1650
14	1650
15	1434
16	1219
17	1291
18	1578
19	1793
20	1721
21	1578
22	1865
23	1434
24	1793
25	1865
26	1506
27	1650
28	1506
29	1721
30	1506