Question: AggTech is currently using Simple Moving Average (SMA) forecasting method with n=3 (i.e., they are using the most recent three observations to calculate the forecast).

AggTech is currently using Simple Moving Average

AggTech is currently using Simple Moving Average (SMA) forecasting method with n=3 (i.e., they are using the most recent three observations to calculate the forecast). However, they are not sure if this is the best method. They decided to compare the SMA(3) with the following: - Weighted Moving Average (WMA) with n=3 and w1=0.40,w2=0.35,w3=0.25, where w1 is the weight of the most recent, w2 is the weight of the second most recent, and w3 is the weight of the oldest observation. - Exponential smoothing (ExpS) with smoothing constant =0.40. Accordingly, they calculated the forecasts and the forecast errors based on the last year's data. In the table below, you see the forecast for SMA, WMA and ExpS, errors for each forecast, absolute errors and the percentage absolute errors. After the analysis, they noticed that there was a mistake in May data. It should be 1072 instead of 870 . You are expected to make this change and recalculate the forecasts, and answer the following questions: a) (5) What are the new forecasts according to SMA(3)? ? b) (5) What are the new forecasts according to WMA(3) with the same weights? c) (5) What are the new forecasts according to ExpS with smoothing constant =0.40. d) (5) Calculate the MAD for each method. e) (5) Calculate the MAPE for each method. f) (5) Calculate the MSE for each method

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