Coastal Fuel Oil is a distributor of fuel oil products in the Northeast. It contracts with shippers for deliveries of home heating oil and distributes product in its own trucks. Since its storage capacity is limited, and purchasing storage for fuel oil it cannot store itself is expensive, accurate demand forecast are valuable. Monthly data covering the past 10 years are given in the following table:
a. Develop an appropriate forecast using a moving average approach.
b. Develop an appropriate forecast using a simple exponential smoothing approach.
c. Develop an appropriate forecast using exponential smoothing with trend (Holt's method.)
d. Develop an appropriate forecast using exponential smoothing with trend and cyclicality (Holt-Winters method).
e. Which of the four forecasts developed above would you recommend using?
This posting presents different methods of forecasting in Excel like Moving Average, Exponential smoothing - Holt Winters etc