1. While the MAD can be used to determine which forecasting method is the most accurate, normally, the MAPE is a better measure. So, compare the MAPE of the three methods and determine which is the best model (e.g. the most accurate).

2. Base on the chosen model, what should you recommend to your boss as the forecasted demand for January?

3. Produce a line chart that shows all three of the forecast and the actual demand.

4. Review the chart and the data. Do you think that the forecasts have given you an accurate result? Do you notice any trends in the data that could affect the January forecast? If so, what would you recommend to your boss?

Forecasting Models

• Simple Moving Average (on a 4 month moving average)
• Weighted Moving Average (4 month moving average with weights = 0.4, 0.3, 0.2. 0.1)
• Exponential Smoothing ( = 0.3) (assume forecast for January is the same as the actual demand)

  Data

  	Demand
  January	1750
  February	1700
  March	1650
  April	1600
  May	1625
  June	1650
  July	1650
  August	1750
  September	1750
  October	1600
  November	1550
  December	1500

  

Demand Data (last 2 years) 1800 1750 1700 1650 1600 1550 1500 1450 1400 1350 April June May April July August September December May June July August December November October November January February March January February March September October