Farquart Focus: Forecasting using two techniques. Which model for the June forecast?
Calculate forecasting on the attached problem.
For the first five months of the year, demand for Focii has been 14, 23, 12, 17 and 18. Farquart Focus has a focus forecasting system (naturally) using just two forecasting techniques. The is a two-period moving average and the second is simply that this period's demand will equal last period's. Farquart uses the MAD for the past three months as the criterion for choosing which model will make the forecast for the next month
a. What will the forecast be for June and which model will be used?
b. Would it make any difference if demand for March had been 30 instead 12?
This solution contains step-by-step calculations to determine the forecast for June and any differences if demand in March would have been a higher value.