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# Director of Supply Chain is developing forecasts: moving average, smoothing factor

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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.

#### Solution Preview

See attached files.

My response used the weighted moving average.

(Column C)
Create the forecast by multiplying the previous value by .4, the one before that by .3, before that .2 and before that .1. Each period's forecast will be ...

#### Solution Summary

The solution carefully explains how to construct a moving average, a weighted moving average, and a forecast using a smoothing factor.

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