Sales of Cool-Man air conditioners have grown steadily during the past five years, as shown in the following table.
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%.
c)Y=421.20 +33.60X if years are coded 1 to 5. MAPE = 1.08%.
d)Linear trend analysis, Why?
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