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• 4.33 Storrs Cycles has just started selling the new Cyclone mountain bike, with monthly sales as shown in the table. First, co-owner Bob Day wants to forecast by exponential smoothing by initially setting February's forecast equal to January's sales with a = .1. Co-owner Sherry Snyder wants to use a three-period moving average.

• 4.33 Storrs Cycles has just started selling the new Cyclone mountain bike, with monthly sales as shown in the table. First, co-owner Bob Day wants to forecast by exponential smoothing by initially setting February's forecast equal to January's sales with a = .1. Co-owner Sherry Snyder wants to use a three-period moving average.

Practical Management Science
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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Note: Use manual computation not in excel
4.33 Storrs Cycles has just started selling the new Cyclone mountain bike, with monthly sales as shown in the table. First, co-owner Bob Day wants to forecast by exponential smoothing by initially setting February's forecast equal to January's sales with a = .1. Co-owner Sherry Snyder wants to use a three-period moving average. %3D BOB'S ERROR SHERRY'S ERROR SALES BOB SHERRY JANUARY 400 FEBRUARY 380 400 MARCH 410 APRIL 375 MAY a) Is there a strong linear trend in sales over time? b) Fill in the table with what Bob and Sherry each forecast for May and the earlier months, as relevant. c) Assume that May's actual sales figure turns out to be 405. Complete the table's columns and then calculate the mean absolute deviation for both Bob's and Sherry's methods. d) Based on these calculations, which method seems more accurate? PX
Transcribed Image Text:4.33 Storrs Cycles has just started selling the new Cyclone mountain bike, with monthly sales as shown in the table. First, co-owner Bob Day wants to forecast by exponential smoothing by initially setting February's forecast equal to January's sales with a = .1. Co-owner Sherry Snyder wants to use a three-period moving average. %3D BOB'S ERROR SHERRY'S ERROR SALES BOB SHERRY JANUARY 400 FEBRUARY 380 400 MARCH 410 APRIL 375 MAY a) Is there a strong linear trend in sales over time? b) Fill in the table with what Bob and Sherry each forecast for May and the earlier months, as relevant. c) Assume that May's actual sales figure turns out to be 405. Complete the table's columns and then calculate the mean absolute deviation for both Bob's and Sherry's methods. d) Based on these calculations, which method seems more accurate? PX
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