Introduction of computerized exponential smoothing system

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Reference no: EM131230945

Two experienced managers at Wilson Boat, Inc. are resisting the introduction of a computerized exponential smoothing system, claiming that their judgmental forecasts are much better than any computer could do. Their past record of predictions is as follows:

Week Actual Demand Manager’s Forecast

1 4,000 4,500

2 4,200 5,000

3 4,200 4,000

4 3,000 3,800

5 3,800 3,600

6 5,000 4,000

7 5,600 5,000

8 4,400 4,800

9 5,000 4,000

10 4,800 5,000

a. How would the manager’s forecast compare to a single exponential smoothing forecast using a = 0.4?

b. Based on whatever calculations you think appropriate, are the manager’s judgmental forecasts performing satisfactorily?

c. What other criteria should be used to select a forecasting method for this company?

Reference no: EM131230945

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