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Forecasting Problems

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Develop a four-month moving average forecast for Garden Wallace Supply and compute the MAD. A three-month moving average forecast was developed in the section on the moving averages in Table 5.3.

Using MAD, determine whether the forecast in Problem 5-12 or the forecast in the section concerning Wallace Garden Supply is more accurate.

Data collected on the yearly demand for 50-pound bags of fertilizer at Wallace Garden Supply are shown in the following table. Develop a three-year moving average to forecast sales. Then estimate demand again with a weighted moving average in which sales in the most recent year are given a weight of 2 and sales in the other two years are each given the weight of 1. Which method do you think is best?

(1,000S OF BAGS)
1 4
2 6
3 4
4 5
5 10
6 8
7 7
8 9
9 12
10 14
11 15

Sales of Cool-Man air conditioners have grown steadily during the past five years.

1 450

2 495

3 518

4 563

5 584

6 ?

The sales manager had predicted, before the business started, that year 1's sales would be 410 air conditioners. Using the exponential smoothing with a weight of = 0.30, develop forecasts for years 2 through 6.

Using the trend projection method, develop a forecasting model for the sales of Cool-Man air conditioners (see problem 5-18).

Management of Davis's Department Store has used time-series extrapolation to forecast retail sales for the next four quarters. The sales estimates are $100,000, $120,000, $140,000, and $160,000 for the respective quarters before adjusting for seasonality. Seasonal indices for the four quarters have been found to be 1.30, 0.90, 0.70, and 1.10, respectively. Compute a seasonalized or adjusted sales forecast.

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Solution Summary

This posting provides solution to several forecasting problems including moving average, exponential smoothing, trend analysis, weighted moving average etc.