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    Sales Records for Fastgro Fertilizer Company

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    1. The Fastgro Fertilizer Company distributes fertilize to various lawn and garden shops. The company must base its production schedule on a forecast of how may tons of fertilizer will be demaned from it. The company has gathered the following data from the past 3 years from its sales records:

    Year Quarter Demand for Fert. (tons)
    1 1 105
    2 150
    3 93
    4 121
    2 5 140
    6 170
    7 105
    8 150
    3 9 150
    10 170
    11 110
    12 130
    a. Compute a three-quarter moving average forecast for quarters 4 through 13 and compute the forecast error for each quarter
    b. Compute a five-quarter moving average forecast for quarters 6 through 13 and compute the forecast error for each quarter.
    c. Compute a weighted three-quarter moving average forecast, using weights of .50, .33, and .17 for the most recent, next recent, and most distant data, respectively, and compute the forecast error for each quarter.
    d. Compare the forecasts developed in (a), (b), and (c), using cumulative error. Which forecast appears to be most accurate? Do any of them exhibit any bias?
    2. The victory plus mutual fund of growth stocks has had the following average monthly price for the past 10 months:
    Month Fund Price
    1 62.7
    2 63.9
    3 68.0
    4 66.4
    5 67.2
    6 65.8
    7 68.2
    8 69.3
    9 67.2
    10 70.1
    Compute the exponentially smoothed forecast with alpha=.40, the adjusted exponential smoothing forecast with alpha=.40 and beta=.30, and the linear trend line forecast. Compare the accuracy of the three forecasts, using cumulative error and MAD, and indicate which forecast appears to be most accurate.
    3. The Bayside Fountain Hotel is adjacent to County Coliseum, a 24,000-seat arena that is home to the city's professional basketball and ice hockey teams and that hosts a variety of concerts, trade shows, and conventions throughout the year. The hotel has experienced the following occupancy rates for the past 9 years, since the coliseum opened:

    Year Occupancy Rate (%)
    1 83
    2 78
    3 75
    4 81
    5 86
    6 85
    7 89
    8 90
    9 86
    Compute an exponential smoothing forecast with alpha=.20, an adjusted exponential smoothing forecast with alpha=.20 and beta=.20, and a linear trend line forecast. Compute the three forecasts, using MAD and average error, and indicate which seems to be most accurate.

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    Solution Summary

    The sales records for Fastgro Fertilizer Company is examined. The three-quarter and five-quarter moving average forecast are determined. These forecasts are developed.