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    Problems Regarding Demand Management and Forecasting

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    Here are the actual tabulated demands for an item for a nine-month period (January through September). Your supervisor wants to test two forecasting methods to see which method was better over this period.
    Month Actual

    January 110
    February 130
    March 150
    April 170
    May 160
    June 180
    July 140
    August 130
    September 140

    a) Forecast April through September using a three-month moving average
    b) Use simple exponential smoothing with an alpha of .3 to estimate April through September
    c) Use MAD to decide which method produced the better forecast over the six-month period.

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    Solution Preview

    Year Consumption Three-Year Moving Total Three-Year Moving Average Error Exponnetial ...

    Solution Summary

    This solution helps with problems regarding demand management and forecasting. It forecasts a three-month moving average, uses simple exponential smoothing, and uses MAD to decide which method produced best forecast. The solution is provided in an Excel file.