Accuracy of the forecasts using mad

Reference no: EM1314657

The Saki motorcycle dealer in the Minneapolis-St. Paul area wants to make an accurate forecast of demand for the Saki Super TXII motorcycle during the next month. Because the manufacturer is in Japan, it is difficult to send motorcycles back or reorder if the proper number is not ordered a month ahead. From sales records, the dealer has accumulated the following data for the past year:

Month Sales	Motorcycle
January	9
February	7
March	10
April	8
May	7
June	12
July	10
August	11
September	12
October	10
November	14
December	16

3-month moving average forecast of demand for April through January is 1.889.

5-month moving average forecast of demand for June through January is 2.429.

Compare the two forecasts computed in (a) and (b), using MAD. Which one should the dealer use for January of the next year?

Reference no: EM1314657

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