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Sarah has been custom manufacturing sweaters now for 7 years. Her annual sales are shown below. Year Sales 1 178 2 215 3 233 4 301 5 337 6 330 7 361   What are her forecasted sales for year 8 using a 5 year weighted average where w1=.4, w2=.3, w3=.15, w4=.1, w5=.05? What are her forecasted sales for year 8 using exponential smoothing? Assume year 7 forecast was 323. Select your own alpha. Which forecast method is the best for Sarah to use based on MAD? Why?

Sarah has been custom manufacturing sweaters now for 7 years. Her annual sales are shown below. Year Sales 1 178 2 215 3 233 4 301 5 337 6 330 7 361   What are her forecasted sales for year 8 using a 5 year weighted average where w1=.4, w2=.3, w3=.15, w4=.1, w5=.05? What are her forecasted sales for year 8 using exponential smoothing? Assume year 7 forecast was 323. Select your own alpha. Which forecast method is the best for Sarah to use based on MAD? Why?

Practical Management Science
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
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Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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Sarah has been custom manufacturing sweaters now for 7 years. Her annual sales are shown below.

Year

Sales

1

178

2

215

3

233

4

301

5

337

6

330

7

361

 

  1. What are her forecasted sales for year 8 using a 5 year weighted average where w1=.4, w2=.3, w3=.15, w4=.1, w5=.05?
  2. What are her forecasted sales for year 8 using exponential smoothing? Assume year 7 forecast was 323. Select your own alpha.
  3. Which forecast method is the best for Sarah to use based on MAD? Why?
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