Sales at a local small business for the past 12 months are given below.
Month Sales (in thousands) Month Sales (in thousands)
January 20 July 53
February 24 August 62
March 27 September 54
April 31 October 36
May 37 November 32
June 47 December 29
The company wants to develop a method to forecast future sales.
a. Use a three-month moving average to forecast the sales for the months April through December.
b. Use a weighted moving average (with .50 for the most recent month, .30 for the next most recent month, and .20 for the oldest month) to forecast the sales for the months April through December.
c. Use exponential smoothing with α = .4 and the forecast for March of 25 to forecast months April through December.
d. Use the mean absolute deviation method (calculated for months April through December only) to determine which forecast approach is the most accurate.