Chapter $8-$ Forecasting

Month Actual $($$Thousands$)$

January $42$

February $58$

March $58$

April $77$

May $91$

June $82$

July $74$

August $68$

September $71$

October $65$

November $50$

December $45$

$1.$ Use a three$-$month moving average to forecast the sales for the months May through December.

$2.$ Use a three$-$month moving weighted average to forecast the sales for the months May through December. Use weights $(3/6),(2/6),$ and $(1/6),$ giving more weight to more recent data.

$3.$ Use exponential smoothing with an alpha of $0\mathrm{.}7$ to forecast the sales for the months of May through December. Assume that the initial forecast for January was $$40,000.$ Start error measurement in May.

$4.$ Compare the performance of the three methods by using the following criterion and state which method you would recommend based on your comparison.

o CFE

o MSE

o MAD

o MAPE