Sales for the past 12 months at Schumacher & Company’s U.S. Retail Division are given below. a) Use a three-month moving average to forecast sales for the months April through December. b) Use the exponential smoothing method to forecast sales for the months of February through December. Use alpha = 0.6, and assume that the forecast for January was 47. c) Compare the performance of these two methods for the months of April through December using the mean squared error (MSE) as the performance criterion. Which method would you recommend? MONTH SALES Jan 52 Feb 60 Mar 54 Apr 36 May 40 Jun 47 Jul 25 Aug 27 Sep 25 Oct 36 Nov 32 Dec 28
Sales for the past 12 months at Schumacher & Company’s U.S. Retail Division are given below. a) Use a three-month moving average to forecast sales for the months April through December. b) Use the exponential smoothing method to forecast sales for the months of February through December. Use alpha = 0.6, and assume that the forecast for January was 47. c) Compare the performance of these two methods for the months of April through December using the mean squared error (MSE) as the performance criterion. Which method would you recommend? MONTH SALES Jan 52 Feb 60 Mar 54 Apr 36 May 40 Jun 47 Jul 25 Aug 27 Sep 25 Oct 36 Nov 32 Dec 28
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter13: Regression And Forecasting Models
Section: Chapter Questions
Problem 42P: The file P13_42.xlsx contains monthly data on consumer revolving credit (in millions of dollars)...
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Sales for the past 12 months at Schumacher & Company’s U.S. Retail Division are given below.
- a) Use a three-month moving average to
forecast sales for the months April through December. - b) Use the exponential smoothing method to forecast sales for the months of February through December. Use alpha = 0.6, and assume that the forecast for January was 47.
- c) Compare the performance of these two methods for the months of April through December using the mean squared error (MSE) as the performance criterion. Which method would you recommend?
MONTH | SALES |
Jan | 52 |
Feb | 60 |
Mar | 54 |
Apr | 36 |
May | 40 |
Jun | 47 |
Jul | 25 |
Aug | 27 |
Sep | 25 |
Oct | 36 |
Nov | 32 |
Dec | 28 |
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