Question 1 - In this exercise you should calculate three types of averages, the absolute forecast error and the mean absolute deviation (MAD) and explain the accuracy.

1. Calculate the straight average for 6 months
2. Calculate the moving average for 3 months
3. Calculate the weighted moving average (WMA) for 3month
4. Calculate the absolute forecast error
5. Calculate the MAD

Weighting assumptions:

• Month 1 = 0.5
• Month 2 = 0.3
• Month 3 = 0.2

Month	1	2	3	4	5	6	7
Historical Actual Values	Forecasted Sales	Straight average	Moving Average (3 month)	WMA (3 month)	Absolute forecast error	MAD
January	153	151
February	149	150
March	151	150
April	152	150
May	147	151
June	151	150
July		150
Total

Question 1b - Which of the forecasts is the most accurate and why?