Please answer as soon as possible and explain in detailsthanks in advance Question Three:Milka makes boxes of chocolates for which the demand is uncertain. " Quarterly demand (in boxes of chocolates) forthe last 3 years follows:QuarterYear 1Year 2Year 313,0003,3003,50221,7002,1002,4489001,5001,76844,4005,1005,882Total10,00012,00013,600Use intuition and judgment to estimate quarterly demand for the fourth year.a-b- Use weighted moving average to estimate the demand for every quarter in the fourth year.Try to calculate the weights from historical data of last two years

Answered: Question Three: Milka makes boxes of…

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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Please answer as soon as possible and explain in details

thanks in advance

Question Three:
Milka makes boxes of chocolates for which the demand is uncertain. " Quarterly demand (in boxes of chocolates) for
the last 3 years follows:
Quarter
Year 1
Year 2
Year 3
1
3,000
3,300
3,502
2
1,700
2,100
2,448
900
1,500
1,768
4
4,400
5,100
5,882
Total
10,000
12,000
13,600
Use intuition and judgment to estimate quarterly demand for the fourth year.
a-
b- Use weighted moving average to estimate the demand for every quarter in the fourth year.
Try to calculate the weights from historical data of last two years

Expert Solution

Step 1

Forecast with intuition and judgment: The demand in year 2 is on the average 20% above year 1 and year 3 is 12% above year 2. Thus the demand is increasing per annum but at a slowing pace. Thus we will assume that in year 4 the demand will grow at 8% approx.

Forecast with weighted moving average: as long as demand is increasing per annum but at a slowing pace, we should always take higher weightage for last year and far lower for previous years. Thus we've taken weighted moving average with assigned weights 60% to year 3, 30% to year 2, and 10% to year 1