Month Demand MA$(3)$ Absolute DeviationMA$(4)$ Absolute Deviation

$117,988$

$218,656$

$319,765$

$418,678$

$520,678$

$6$

$1.(15$ pts$)$ Use the moving average method $($N$=3)$ to forecast sales for each applicable period.

$2.(15$ pts$)$ Compute the mean absolute deviation $($MAD$).$ Intermediate steps shown in colume D$.$

MAD

$3.(10$ pts$)$ Calculate the mean aboste deviation using the moving average method $($N$=4).$

MAD

$4.(5$ pts$)$ Which forecasting method is more accurate, MA$(3)$ or MA$(4)?$ Why?

$5.(5$ pts$)$ Compared to the moving average method, do you think a forecasting method that corrects for trend and seasonality can provide better forecast? Why?

Hint. Please check whether the demand history shows trend or seasonality.