1. What is the basic difference between a weighted moving average and exponential smoothing?

2. Briefly describe the steps that are used to develop a forecasting system.

3. Sales of Honda popular Fit have grown steadily at auto dealerships in Jamaica during the past 5 years (see table below). The sales manager had predicted before the new model was introduced that first-year sales would be 410 Fits. Using exponential smoothing with a weight of .30, develop forecasts for years 2 through 6.

Year Sales Forecast

1 450 410

2 495

3 518

4 563

5 584

6 ?

Question 4

Year 1 2 3 4 5 6 7 8 9 10 11

Demand 7 9 5 9 13 8 12 13 9 11 7

a. Starting with year 4 and going to year 12, forecast demand using a 3-year moving average

b. Starting with year 4 and going to year 12, forecast demand using a 3-year moving average with weights of .1, .3, and .6 using .6 for the most recent years.

c. At a glance at the forecast against the original data, which seems to give the better results?