Question

The CEO requested forecasts based on the given historical data.  Put your final answers in the table....

The CEO requested forecasts based on the given historical data.  Put your final answers in the table.

Round answers to 3 decimals for each method. Show work for full credit.

Period

Actual Demand

3 Month Moving Average

Moving Average Tracking Signal

3 Month Weighted Average

Weighted Average Tracking Signal

1

62

X

X

X

X

2

59

X

X

X

X

3

48

X

X

X

X

4

57

56.33

59.4

5

60

54.66

54.4

6

56

55

52.83

MAD

X

X

MAPE

X

X

  1. (10 pts) Calculate simple three-month moving average forecast for periods 4-6.
  1. (10 pts) Calculate weighted three-month moving average forecast for periods 4-6. The weights are .5 for t-1, .4 for t-2. and .1 for t-3.
  1. (15 pts) Calculate the mean absolute deviation – MAD, mean absolute percent error – MAPE, and tracking signal for each of the methods above.

The CEO requested forecasts based on the given historical data.  Put your final answers in the table.

Round answers to 3 decimals for each method. Show work for full credit.

Period

Actual Demand

Single Exponential Smoothing

Single Exponential Tracking Signal

Exponential Smoothing with Trend

Smoothing with Trend Tracking Signal

1

62

60

60

2

59

3

48

4

57

5

60

6

56

MAD

X

X

MAPE

X

X

  1. (25 pts) Calculate single exponential smoothing forecast for periods 2-6. The initial forecast (F1) is 60 and an α (alpha) .40.
  1. (25 pts) Calculate exponential smoothing with trend forecast for periods 2-6.

The initial forecast with trend(F1)  of 59, and trend (T1) of  1, FIT1= 60, α (alpha) .40 and ? (delta) of .30.

  1. (15 pts) Calculate the mean absolute deviation – MAD, mean absolute percent error – MAPE, and tracking signal for each of the methods above.

Homework Answers

Answer #1

10. Using 3 period Moving Average Forecast method, the forecast would be:

F(6) = {Actual(3) + Actual(4) + Actual(5)}/3

= (52 + 80 + 79)/3

= 70.33

Using the Last Value forecast method, the forecast would be:

F(6) = Actual(5)

= 79

11. Using the exponential smoothing, the forecast would be:

F(4 Years Ago) = 0.8*Actual(5 Years Ago) + (1-0.8)*F(5 Years Ago)

= 0.8*1270 + 0.2*1200

= 1256

F(3 Years Ago) = 0.8*1060 + 0.2*1256

= 1099.2

F(2 Years Ago) = 0.8*1500 + 0.2*1099.2

= 1419.84

F(Last Year) = 0.8*1100 + 0.2*1419.84

= 1163.968

F(Next Year) = 0.8*1030 + 0.2*1163.968

= 1057 Approximately

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