Your manager is trying to determine what forecasting method to use. Based upon the following historical data, calculate the following forecast and specify what procedure you would utilize.

Month	Actual Demand	Month	Actual Demand
1	62	7	76
2	65	8	78
3	67	9	78
4	68	10	80
5	71	11	84
6	73	12	85

1. Calculate the simple three-month moving average forecast for periods 4 to 12.
2. Calculate the weighted three-month moving average using weights of 0.5, 0.3, and 0.2 for periods 4 to 12.
3. Calculate the simple exponential smoothing forecast for periods 2 to 12 using an initial forecast (F1) of 61 and an of 0.3.
4. Calculate the mean absolute deviation (MAD) for the forecasts made by each technique in periods 4 to 12. Which forecasting method do you prefer? Why?

Absolute deviation 3-mo Weighted MA Absolute deviation Exponential Smoothing Absolute deviation Month (t) Demand 3-mo. MA 1 62 2 65 3 67 1 4 5 68 71 73 64.67 66.67 68.67 70.67 6 61.3 62.41 63.787 65.051 66.836 68.685 70.879 73.016 74.511 7 65.4 67.1 69.3 71.4 74.1 76.4 77.6 76 8 78 73.33 75.67 9 78 10 80 - 77.33 11 84 78.67 79 76.158 12 85 80.67 81.6 78.51 MAD