c-1. Calculate MAD for each method. (Round your answers to 2 decimal places.) MAD Three-month moving average Exponential smoothing c-2. Use MAD to decide which method produced the better forecast over the six-month period.
c-1. Calculate MAD for each method. (Round your answers to 2 decimal places.) MAD Three-month moving average Exponential smoothing c-2. Use MAD to decide which method produced the better forecast over the six-month period.
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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Transcribed Image Text:c-1. Calculate MAD for each method. (Round your answers to 2 decimal places.)
MAD
Three-month moving
average
Exponential smoothing
c-2. Use MAD to decide which method produced the better forecast over the six-month period.
Exponential smoothing.
Three-month moving average.
Transcribed Image Text:Here are the actual tabulated demands for an item for a nine-month period (January through September). Your supervisor wants to test
two forecasting methods to see which method was better over this period.
MONTH
АCTUAL
January
February
March
April
124
125
154
174
May
161
June
180
July
August
September
144
138
142
a. Forecast April through September using a three-month moving average. (Round your answers to 2 decimal places.)
Three-Month
Moving Average
134.33
Month
April
May
151.00
June
163.00
July
171.66
August
161.66
September
154.00
b. Use simple exponential smoothing with an alpha of 0.40 to estimate April through September, using the average of January
through March as the initial forecast for April. (Round your answers to 2 decimal places.)
Exponential
Smoothing
Month
April
142.20
May
154.92
June
157.35
July
166.41
August
157.45
September
149.67
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