Question: Problem 2: Forecasting Methods (7 points) Below is the actual demand for an item over a 6-month period. Your boss wants to test two forecasting

Problem 2: Forecasting Methods (7 points)

Below is the actual demand for an item over a 6-month period. Your boss wants to test two forecasting methods to see which method was better over this period.

Month Actual Demand

June 260

July 280

Aug 210

Sept 330

Oct 250

Nov 220

  1. Forecast Sept-Dec using a three-month moving average. (2 points)
  2. Forecast Aug-Dec using a two-month weighted moving average. Use 0.8 for the weight for the most recent month, and 0.2 for the weight for the previous month. (2 points)
  3. Calculate the MAD for each forecast you created in parts a and b. (2 points)
  4. Using the more accurate forecast you identified in part c, what is your forecast for December? (1 point you can leave the answer as a decimal)

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