1. Explain exponential smoothing and what the MAD and MSE scores mean in the attached spreadsheet.
The original assignment was as follows.
Your Director of Supply Chain needs help in developing forecasts. Choose one of the following three options.
Develop forecasts for periods 6 through 24 using MA with 3 periods, 4 periods, and 5 periods, or...
Develop forecasts for periods 3 through 24 using a smoothing factor of 0.2 and 0.3, or...
Develop forecasts for periods 5 through 24 using weighted moving average with weights of 0.4, 0.3, 0.2, and 0.1.
Calculate the MAD and MSE for all of your forecasts. Start MAD and MSE calculations for moving averages in period 6. Start MAD and MSE calculations for exponential smoothing in period 5. Start MAD and MSE calculations for Weighted Averages in period 5.
Just need help with Item 1.
In statistics, exponential smoothing refers to a particular type of moving average technique applied to time series data, either to produce smoothed data for presentation, or to make forecasts. The time series data themselves are a sequence of observations. The observed phenomenon may be an ...
The solution answers the question below in great detail.