Problem $12-6($Algo$)$

Assume that you are the production manager for Fast Current Kayaks of Washington State. One of the products that you make and sell is the "Fast Current" sea touring kayak paddle. You are responsible for ensuring that there is enough production capacity to meet demand $($given the very high markup on the paddles$).$

Year Quarter Demand

Year $1$ Q$117$

Year $1$ Q$219$

Year $1$ Q$318$

Year $1$ Q$420$

Year $2$ Q$124$

Year $2$ Q$226$

Year $2$ Q$326$

Year $2$ Q$429$

Year $3$ Q$129$

Year $3$ Q$232$

Year $3$ Q$334$

Year $3$ Q$433$

Year $4$ Q$133$

Year $4$ Q$236$

Year $4$ Q$339$

Year $4$ Q$442$

Year $5$ Q$145$

Year $5$ Q$245$

Year $5$ Q$347$

Year $5$ Q$447$

Year $6$ Q$148$

Year $6$ Q$247$

Year $6$ Q$350$

Year $6$ Q$453$

Year $7$ Q$154$

Year $7$ Q$253$

Year $7$ Q$355$

Year $7$ Q$458$

Year $8$ Q$158$

Year $8$ Q$262$

Year $8$ Q$365$

Year $8$ Q$468$

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a$.$Given the data shown above, beginning in Quarter $1$ of year $2,$ use a moving average based on four quarters to predict the demand in each quarter.

b$.$Using the same data, forecast demand using exponential smoothing. You are given an initial forecast for year $1,$ quarter $1$ of $17\mathrm{.}0.$ When generating your forecasts, assume that the smoothing coefficient is $0\mathrm{.}10.$

c$.$ Which of the forecasting procedures performed the best with respect to MAD?