Data collected on the yearly demand for 50-pound bags of

Question

Data collected on the yearly demand for 50-pound bags of fertilizer at Wallace Garden Supply are shown in the following table:

Year	Bags (in thousands)	Year	Bags (in thousands)
1	4	7	7
2	6	8	9
3	4	9	12
4	5	10	14
5	10	11	15
6	8

a) Develop  two-year, three-year, and four-year moving averages to forecast demand in year 12.

b) Forecast demand with a three-year weighted moving average in which demand in the most recent year is given a weight of 2 and demands in the two years are each given a weight of 1.

c) Forecast demand by using exponential smoothing that the forecast for year 1 is 5,0000 bags to begin the procedure.

d) Which of the methods analyzed here would you use. Explain your answer.

Answers for above:

A) MAPE_2-MA =22.57%, MAPE_3-MA  =22.92%, MAPE_4-MA  =27.07%.

_B) MAPE_3-WMA  = 21.17%.

_C) MAPE_2-MA  =25.50%

3-PERIOD SEEMS TO BE THE BEST,   BUT WHY?