Topic 3

Book: Operations and Supply Chain Management Jacobs & Chase 14e

7. Here are the actual tabulated demands for an item for a nine month period. Your supervisor wants to test two forecasting methods to see which method was better over this period.

a) Forecast April through September using the three month moving average.

b) Use simple exponential smoothing with and alpha of .3 to estimate April through September using the three month moving average of January through M arch as the initial forecast for April.

c) Use MAD to decide which method produced the better forecast over the six month period.

Month	Demand	3Mo.	Absolute	Exponential	Absolute
		MA (a)	Deviation	Smoothing (b)	Deviation
January	115
February	140
March	141
April	168
May	158
June	183
July	144
August	135
Septemer	145
MAD (c)					+

1 IUILLUSL 101 HPill. c) Use MAD to decide which method produced the better forecast over the six month period th Deman am 3 Mo. Absolute Exponential Absolute Smoothing Deviation MA Deviation (a) Deviation (b) January February March April May June July August Septemer 115 140 141 168 158 183 144 135 145 MAD (c) D Focus B E ere to search