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Forecasting problem:Cool-Man air conditioners

Sales of Cool-Man air conditioners have grown steadily during the past five years, as shown in the following table.
Year Sales
1 450
2 495
3 518
4 563
5 584

a) using exponential smoothing constants of 0.3, 0.6, and 0.9, develop forecasts for years 2 through 6. The sales manager had predicted, before the business started, that year 1's sales would be 410 air conditioners. Which smoothing constant gives the most accurate forecast?
b) Use a three-year moving average forecasting model to forecast sales of Cool-Man air conditioners.
c) Using linear trend analysis, develop a forecasting model for the sales of Cool-Man air conditioners.
d) Which of the methods analyzed here would you use? Explain your answers.

Answers for above:
a)MAPE0.3=15.37%, MAPE0.6 =10.20%, MAPE0.9 =7.05%.
b)MAPE3-MA 11.71%.
c)Y=421.20 +33.60X if years are coded 1 to 5. MAPE = 1.08%.
d)Linear trend analysis, Why?


Solution Summary

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