Refer to Solved Problem 4.1 on page 144. Using smoothing constants of .6 and .9, develop forecasts for the sales of VW Beetles. What effect did the smoothing constant have on the forecast? Use MAD to determine which of the three smoothing constants (.3, .6, or .9) gives the most accurate forecast. SOLVED PROBLEM 4.1 Sales of Volkswagen's popular Beetle have grown steadily at auto dealerships in Nevada during the past 5 years (see table below). The sales manager had predicted before the new model was introduced that first year sales would be 410 VWs. Using exponential smoothing with a weight of a 5 .30, develop forecasts for years 2 through 6. YEAR SALES FORECAST 1 450 410 2 495 3 518 4 563 5 584 6 ? SOLUTION YEAR FORECAST 1 410.0 2 422.0 = 410 + .3 (450 - 410) 3 443.9 = 422 + .3 (495 - 422) 4 466.1 = 443.9 + .3 (518 - 443.9) 5 495.2 = 466.1 +.3 (563 - 466.1) 6 521.8 = 495.2 + .3 (584 - 495.2)