The monthly sales data of Murphy Brothers Furniture from Year 2009 to Year 2014 are provided in the file “Assignment 2 Template.xlsx”. Using the sales data, develop forecasting models for the period from Jan 2010 to Jan 2015, based on the following sub-questions. For questions from (2) to (6), show the accuracy measures: Mean Forecast Error (MFE), Mean Absolute Deviation (MAD), Mean Absolute Percentage Error (MAPE), and Tracking Signal (TS).
(1) Draw a chart and show the linear trend and its equation.
(2) Develop the naïve forecast model (last period) using the single previous sales amount.
(3) Perform the 3-month simple moving average.
(4) Perform the 3-month weighted moving average using the weights 0.5, 0.3, and 0.2 respectively in more recent order.
(5) Perform the exponential smoothing using alpha value 0.3. (Set the forecast sales for Jan 2010 as the sales amount of the previous month (Dec 2009)).
(6) Show forecast values for each month using the linear trend (regression): Use the given table for the forecast.
(7) After showing forecast value for each month using the linear trend model, calculate the seasonal index for Jan, and generate the new forecast value for Jan 2015. (Create the trendline forecast from Jan 2009 to Dec 2014 to calculate the seasonal index for January.)