Problem: Manager John is trying to decide how many service crew he will need to support his restaurant operations for the next month. First, he needs to identify a suitable forecasting model to estimate next month$$s demand. He is considering four alternative models:

Model $1$: Na$$ve method starting at the $5$th month

Model $2$: Four$-$month moving average

Model $3$: Four$-$month weighted moving average with weights $=\mathrm{.}1,\mathrm{.}2,\mathrm{.}3,\mathrm{.}4$

Model $4$: Exponential smoothing with $\backslash$alpha $=0\mathrm{.}7$ starting at the $6$th month

Month

Actual Demand

Model $1$ Forecast

Model $2$ Forecast

Model $3$ Forecast

Model $4$ Forecast

$1$

$1940$

$2$

$2250$

$3$

$2301$

$4$

$2630$

$5$

$2264$

$6$

$2736$

$7$

$2503$

$8$

$2422$