Problem: The Fastgro Fertilizer Company distributes fertilizer to various lawn and garden shops. The company must base its quarterly production schedule on a forecast of how many tons of fertilizer will be demanded from it. The company has gathered the following data for the past three years from its sales records:
Year Quarter Demand for Fertilizer
(ton)
1 1 105
2 150
3 93
4 121
2 5 140
6 170
7 105
8 150
3 9 150
10 170
11 110
12 130
Q1. Compute a 3-quarter moving average forecast for quarters 4-13 and compute the forecast error for each quarter.
Q2. Compute a 5-quarter moving average forecast for quarters 6-13 and compute the forecast error for each quarter.
Q3. Compare the forecasts developed in parts 1 and 2 using cumulative error. Which forecast appears to be most accurate?
Q4. Graph the demand data from the table above. Can you identify any trends, cycles, and/or seasonal patterns?