For the first five months of the year, demand of Focci has been 14, 23, 12, 17 and 18. Farquart Focus has a focus forecasting system (naturally) using just two forecasting techniques. The first 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 of 12?
attached is the solution to your problem.
2 period moving average
Month Demand Forecast Error Absolute ...
This solution contains the the 2-period moving average from January to May and predicted a forecast for June. It also makes a conclusion on the difference if demand for March has been 30 instead of 12.