Question 1M&H company ltd. sells television sets and has collected monthly sales data (in units) for the past 12months as shown in table 1below: TABLE 1 Month Sales (Units)1 1202 1353 1504 1655 1806 2007 1958 2109 225 10 24011 25512 270 Using the data provided, answer the following questions: a. Using a 3-month weighted moving average with weights 0.5, 0.3, and 0.2 (most recent monthhaving the highest weight), calculate the forecast for month 13. b. If the company applies an exponential smoothing method with a smoothing constant (α) = 0.2,and assumes an initial forecast of 120 units for Month 1, calculate the forecast for month 13.c. Calculate the Mean Absolute Deviation (MAD) for the exponential smoothing method andweighted moving average method using the actual sales data for Months 4 to 12 and determinewhich method is more accurate. d. Compute the values of a (intercept) and b (slope) using the least squares method.e. Use the trend equation to forecast the demand for Month 13.
Question 1
M&H company ltd. sells television sets and has collected monthly sales data (in units) for the past 12
months as shown in table 1below:
TABLE 1
Month Sales (Units)
1 120
2 135
3 150
4 165
5 180
6 200
7 195
8 210
9 225
10 240
11 255
12 270
Using the data provided, answer the following questions:
a. Using a 3-month weighted moving average with weights 0.5, 0.3, and 0.2 (most recent month
having the highest weight), calculate the forecast for month 13.
b. If the company applies an exponential smoothing method with a smoothing constant (α) = 0.2,
and assumes an initial forecast of 120 units for Month 1, calculate the forecast for month 13.
c. Calculate the Mean Absolute Deviation (MAD) for the exponential smoothing method and
weighted moving average method using the actual sales data for Months 4 to 12 and determine
which method is more accurate.
d. Compute the values of a (intercept) and b (slope) using the least squares method.
e. Use the trend equation to forecast the demand for Month 13.
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