1. The owner of the Chocolate Outlet Store wants to forecast chocolate demand. Demand for the preceding four years is shown in the following table:
|
YEAR
|
DEMAND (POUNDS)
|
|
1
|
68,800
|
|
2
|
71,000
|
|
3
|
75,500
|
|
4
|
71,200
|
Forecast demand for Year 5 using the following approaches: (1) a three-year moving average; (2) a three-year weighted moving average using. 40 for Year 4, .20 for Year 3, and .40 for Year 2; (3) exponential smoothing with a = .30, and assuming the forecast for Period 1 = 68,000.
2. The forecasts generated by two forecasting methods and actual sales are as follows:
|
MONTH
|
SALES
|
FORECAST1
|
FORECAST 2
|
|
1
|
269
|
275
|
268
|
|
2
|
289
|
266
|
287
|
|
3
|
294
|
290
|
292
|
|
4
|
278
|
184
|
298
|
|
5
|
268
|
270
|
274
|
|
6
|
269
|
268
|
270
|
|
7
|
260
|
261
|
259
|
|
8
|
275
|
271
|
275
|
Compute the MSE, the MAD, the MAPE, the RSFE, and the tracking signal for each forecasting method. Which method is better? Why?