Question 2

a) Compare three (3) advantages and three (3) disadvantages of the moving average forecasting model.

b) Several measures are used in practice to calculate the overall forecast error. These measures can be used to compare different forecasting model as well as to monitor forecast to ensure they are performing well. Elaborate three (3) popular measures of forecast.

c) Sales of hair dryer at the Walgreens stores in Youngstown Ohio, over the past 4 months have been 100, 110, 120 and 130 units (with 130 being the most recent sales). Develop a moving average forecast for next month using these three (3) techniques:

(i) 3-month moving average

(ii) 4-month moving average

(iii) Weighted 4-month moving average with most recent month weighted 4, the preceding month 3, then 2 and the oldest month weighted 1

(iv) If next month's sales turn out to be 140 units, forecast the following month's sales (Month's) using a 4-month moving average

c) Propose four (4) things needed to develop an aggregate plan.