Question: Chapter 4 Question 17 (Note: Solved Problem 4.1 mentioned in the question can be found on page 138) Refer to Solved Problem 4.1 on page

Chapter 4 Question 17 (Note: Solved Problem 4.1 mentioned in the question can be found on page 138) Refer to Solved Problem 4.1 on page 144. Using smoothing constants of 6 and .9, develop forecasts for the sales of VW Beetles. What effect did the smoothing constant have on the forecast? Use MAD to determine which of the three smooth-ing constants (-3, .6, or .9) gives the most accurate forecast. SOLVED PROBLEM 4.1 Sales of Volkswagen's popular Beetle have grown steadily at auto dealerships in Nevada 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 VWs. Using exponential smoothing with a weight of a 5.30, develop fore-casts for years 2 through 6. YEAR SALES FORECAST 1 450 410 2 495 3 518 4 563 5 584 6 ? SOLUTION YEAR FORECAST 1 410.0 2 422.0 - 410 + .3 (450 - 410) 443.9 = 422+.3 (495 - 422) 3 2 495 3 518 4 563 5 584 6 ? SOLUTION YEAR FORECAST 1 410.0 2 3 4 422.0 - 410 + .3 (450 - 410) 443.9 = 422 + 3 (495-422) 466.1 - 443.9+.3 (518 - 443.9) 495.2 - 466.1 + 3 (563 - 466.1) 521.8 - 495.2 + 3 (584 - 495.2) 5 6 All of the above None of the above 0-09 03 06

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