Question $3$

Analyst at Semarak Perfume Sdn$.$ Bhd$.$ company about forecasting monthly demand for inventory from warehouse. The analyst suggests that to consider using exponential smoothing with smoothing constants $0\mathrm{.}2$ and $0\mathrm{.}3.$ The company decides to compare the accuracy of the smoothing constants for the most recent second quarter of the year. Below is the data for the most recent quarter.

$\backslash$table$[[$Month$,\backslash$table$[[$Sales$],[($Thousands of RM$)]]],[$December$,20],[$January$,22],[$February$,17],[$March$,23],[$April$,15],[$May$,19],[$June$,20]]$

a$)$ Calculate the exponential smoothing forecast for periods January to June. Use $a=0\mathrm{.}2$ and $=0\mathrm{.}3$

$(14$ Marks$)$

b$)$ Calculate the mean absolute deviation $($MAD$)$ for the forecast. Based on MAD, which forecasting method is the best.

$(4$ Marks$)$

c$)$ Forecast July use the smallest mean absolute deviation.

$(2$ Marks$)$

$[$Total: $20$ Marks$]$