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Question 1

Historical demand for a product is as follows:
June (150)
July (165)
August (175)
September (140)
October (155)
November (155)

Calculate a weighted moving average forecast for December using weights of 0.4, 0.3 and 0.3.

Using single exponential forecast with alpha = 0.3 and a starting forecast for June of 155,

Calculate the forecast for the other 5 months and also calculate the mean absolute deviation (MAD) for the forecasts.

What effect does changing the alpha to 0.4 have on the forecasts and the MAD?

Explain the differences. Be sure to demonstrate your work and provide a brief interpretation. (200 words maximum)

By Day 3, submit your Key Concept Exercise using the submission link provided.


Question 2

What are the advantages and disadvantages of using the weighted moving average and the exponential smoothing methods of forecasting? Which industries or products would use these methods of forecasting? Explain why. (300 words maximum)

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