PLEASE SHOW YOUR WORK

Problem 1

A manager wants to choose one of two forecasting alternatives: moving average and exponential smoothing. Each alternative was tested using historical data. The resulting forecast errors for the two are shown in the table.

Period (t)	1	2	3	4	5	6
Forecasting Errors using Moving Average	3	-2	2	2	2	4
Forecasting Errors using Exponential Smoothing	4	-3	3	-1	3	5

(a) Calculate MAD for Moving Average Method and Exponential Smoothing Method (2 Points)

(b) Calculate MSE for Moving Average Method and Exponential Smoothing Method (2 Points)

(c) Based on Part (a) and Part (b), which forecasting method (Moving Average or Exponential Smoothing) should be used in this problem? Please explain your reasons. (2 Points)