QUARTER YEAR ACTUAL NUMBER OF USERS IN MILLIONS FORECASTED DEMAND2 QUARTER MOVING AVERAGE ABSOLUTE FORECAST ERROR FORECASTED DEMAND3 QUARTER MOVING AVERAGE ABSOLUTE FORECAST ERROR EXPONENTIAL SMOOTHING WITH SMOOTHING CONSTANT OF 0 2 ABSOLUTE FORECAST ERROR EXPONENTIAL SMOOTHING WITH SMOOTHING CONSTANT OF 0 9 ABSOLUTE FORECAST ERROR Q1 2010 30 Q2 2010 40 Q3 2010 49 Q4 2010 54 Q1 2011 68 Q2 2011 85 Q3 2011 101 Q4 2011 117 Q1 2012 1A Forecast demand using the two quarter moving average and the three quarter moving average 1B Forecast demand using exponential smoothing, one with the smoothing constant of 0 2 and the other with a smoothing constant of 0 9 Note Set the forecast for Q1 2010 equal to the demand level for Q1 2010 1C Calculate the mean absolute deviation (MAD) of each forecasting method Which forecasting method would you recommend Alvin Ortega use Explain why

Question: QUARTER/YEAR ACTUAL NUMBER OF USERS IN MILLIONS FORECASTED DEMAND2-QUARTER MOVING AVERAGE ABSOLUTE FORECAST ERROR FORECASTED DEMAND3-QUARTER MOVING AVERAGE ABSOLUTE FORECAST ERROR EXPONENTIAL SMOOTHING WITH SMOOTHING

QUARTER/YEAR	ACTUAL NUMBER OF USERS IN MILLIONS	FORECASTED DEMAND—2-QUARTER MOVING AVERAGE	ABSOLUTE FORECAST ERROR	FORECASTED DEMAND—3-QUARTER MOVING AVERAGE	ABSOLUTE FORECAST ERROR	EXPONENTIAL SMOOTHING WITH SMOOTHING CONSTANT OF 0.2	ABSOLUTE FORECAST ERROR	EXPONENTIAL SMOOTHING WITH SMOOTHING CONSTANT OF 0.9	ABSOLUTE FORECAST ERROR
Q1/2010	30
Q2/2010	40
Q3/2010	49
Q4/2010	54
Q1/2011	68
Q2/2011	85
Q3/2011	101
Q4/2011	117
Q1/2012		1A. Forecast demand using the two-quarter moving average and the three-quarter moving average. 1B. Forecast demand using exponential smoothing, one with the smoothing constant of 0.2 and the other with a smoothing constant of 0.9. Note: Set the forecast for Q1/2010 equal to the demand level for Q1/2010. 1C. Calculate the mean absolute deviation (MAD) of each forecasting method. Which forecasting method would you recommend Alvin Ortega use? Explain why.

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