Forecast

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(See attached file for full problem description)

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Consider the following forecasts:

a. Calculate the three month Simple Moving Average forecast for months 4 – 11 for the following demand data:

Month Demand SMA
Forecast Error Absolute Error ( |E| )
1 120
2 115
3 125
4 119
5 127
6 114
7 120
8 124
9 116
10 137
11
b. Calculate the three month Weighted Moving Average forecast for months 4 – 11 for the following demand data using weights of 0.5, 0.3, and 0.2:

Month Demand WMA
Forecast Error Absolute Error ( |E| )
1 120
2 115
3 125
4 119
5 127
6 114
7 120
8 124
9 116
10 137
11

c. Calculate the Exponential Smoothing forecast for months 4 – 11 for the following demand data:
Use the demand for period (month) 1 as the forecast for period (month) 2. Use an alpha of 0.6

Month Demand Exponential Smoothing
Forecast Error Absolute Error ( |E| )
1 120
2 115
3 125
4 119
5 127
6 114
7 120
8 124
9 116
10 137
11

d. Determine CFE and MAD for months 4 – 11 for each of the methods in part a, b, & c

Simple Moving Average Weighted Moving Average Exponential
Smoothing
CFE
MAD

e. Use the following quarterly data (sales in units) to develop seasonal indexes:

Quarter Year 1 Year 2 Year 3 Seasonal Index Year 4
1 51 62 74
2 103 124 133
3 172 199 222
4 296 332 367
Total 622 717 796

f. If the forecasted annual demand for Year 4 is 900, calculate the quarterly demands for Year 4.
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https://brainmass.com/business/business-management/81490
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Problem6.doc