The manager of the Carpet City outlet needs to make an accurate forecast of the demand for Soft Shag carpet (its biggest seller). If the manager does not order enough carpet from the carpet mill, customers will buy their carpet from one of Carpet City’s many competitors. The manager has collected the following demand data for the past 8 months: Demand for Soft Shag Month Carpet (1,000 yd.) 1 8 2 12 3 7 4 9 5 15 6 11 7 10 8 12 a. Compute a 3-month moving average forecast for months 4 through 9. b. Compute a weighted 3-month moving average forecast for months 4 through 9. Assign weights of .55, .33, and .12 to the months in sequence, starting with the most recent month. c. Compare the two forecasts by using MAD. Which forecast appears to be more accurate?
The manager of the Carpet City outlet needs to make an accurate forecast of the demand for Soft Shag carpet (its biggest seller). If the manager does not order enough carpet from the carpet mill, customers will buy their carpet from one of Carpet City’s many competitors. The manager has collected the following demand data for the past 8 months: Demand for Soft Shag Month Carpet (1,000 yd.) 1 8 2 12 3 7 4 9 5 15 6 11 7 10 8 12 a. Compute a 3-month moving average forecast for months 4 through 9. b. Compute a weighted 3-month moving average forecast for months 4 through 9. Assign weights of .55, .33, and .12 to the months in sequence, starting with the most recent month. c. Compare the two forecasts by using MAD. Which forecast appears to be more accurate?
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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Question
The manager of the Carpet City outlet needs to make an accurate
Shag carpet (its biggest seller). If the manager does not order enough carpet from the carpet mill,
customers will buy their carpet from one of Carpet City’s many competitors. The manager has
collected the following demand data for the past 8 months:
Demand for Soft Shag
Month Carpet (1,000 yd.)
1 8
2 12
3 7
4 9
5 15
6 11
7 10
8 12
a. Compute a 3-month moving average forecast for months 4 through 9.
b. Compute a weighted 3-month moving average forecast for months 4 through 9. Assign
weights of .55, .33, and .12 to the months in sequence, starting with the most recent month.
c. Compare the two forecasts by using MAD. Which forecast appears to be more accurate?
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