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    Forecasting: Moving Averages, Exponential Smoothing

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    A. Use 5 period moving average (MA n=5) to compute the forecasts of sales for months 6 to 20 and a 7 period moving average (MA n=7) to compute forecasts for months 8 to 20.
    b. Use an exponential smoothing approach with a smoothing constant alpha =0.2 to forecast sales for month 2 to 20. Change alpha to 0.1. Does this make the forecast better or worse? (calculate the MSD and compare their MSD Explain. Assume that the forecast for month 2 is 22 (same as first month's sales)
    c. Find alpha that minimizes the MSD. (using solver)

    Data:
    Month Sales
    1 22
    2 21
    3 24
    4 30
    5 25
    6 25
    7 33
    8 40
    9 36
    10 39
    11 50
    12 55
    13 44
    14 48
    15 55
    16 47
    17 61
    18 58
    19 55
    20 60

    Please see the attached file for full problem description including data chart.

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    https://brainmass.com/statistics/central-tendency/forecasting-moving-averages-exponential-smoothing-24924

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    Solution Summary

    Forecasts using moving average, exponential smoothing and finds alpha that minimizes the MSD.

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