1. In order to decrease the responsiveness (volatility) of following forecast models, what can you do?

Simple moving average method - describe in terms of averaging periods (number of data points to use):

Exponential Smoothing method describe in terms of alpha value (smoothing constant):

2. During last 4 months two different forecasting models resulted as below compared to actual values. Which method is more accurate using MAD? Show all work.

Month	actual	Model 1	Model 2
1	25	28	34
2	30	29	30
3	22	25	23
4	36	28	33

3. A small car dealership keeps a log of how many cars it sells. During last 7 months, they sold a total of 140 cars. They also monitor accuracy of their forecasting model by calculating the tracking signal. Following is the data for last 7 months. They use +5 and -5 as their tracking signal UCL and LCL. How is the model performing?

Month	Tracking Signal
1	-1.0
2	-1.5
3	-2.0
4	-2.0
5	-3.5
6	-5.8
7	-9.5