The data below consists of the demand values for the last 12 months of electrical gadgets of

Lakamuun Inc. and their available future forecasts.

Month Demand

January 240

February 251

March 304

April 284

May 352

June 300

July 241

August 284

September 312

October 289

November 385

December 256

Required

i. Using exponential smoothing forecasting with an =0.2 and a forecast of 270

for January, complete the table below and use it to calculate the Mean Squared

Error

(t) (Yt) (Ft) (Yt-Ft) (Yt-Ft)

1 240 270

2 251

3 304

4 284

5 352

6 300

7 241

8 284

9 312

10 289

11 385

12 256

Note Yt is Actual demand and Ft is forecast

ii. Using a four month moving average calculate the Mean Squared Error.

iii. Which of these two forecasting methods is accurate? Justify your answer

iv. State three benefits of forecasting to business organization