Develop forecasts for periods 7 through 10 for the demand data in the table using a three period moving average, a weighted moving average using 0.6, 0.3, and 0.1, and exponential smoothing with alpha = 0.7
Use a 6th period forecast of 135 as the starting point for the exponential smoothing technique.
Period Actual MA n = 3 WMA Exp. Smoothing
1 64
2 84
3 91
4 97
5 115
6 135
7 137
8 144
9 153
10 171
What will be an ideal response?
Answer:
Period Actual MA n = 3 WMA Exp. Smoothing
1 64
2 84
3 91
4 97
5 115
6 135
7 137 115.7 125.2 135
8 144 129.0 134.2 136.4
9 153 138.7 141 141.7
10 171 144.7 148.7 149.6
Sample calculations for each follow:
Moving Average: =
F7 = = 115.7
Weighted Moving Average: =
F7 = 0.6 × 135 + 0.3 × 115 + 0.1 × 97 = 125.2
Exponential Smoothing: Ft+1 = αDt + (1 - α)Ft
F7 = 0.7 × 135 + 0.3 × 135 = 135
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