Altavox is a manufacturer and distributor of a lot of electronic instruments and devices, including digital/analog multimeters, function generators, oscilloscopes, frequency counters and other test equipment and calculating equipment. Altavox sells a line of test meters that are popular with professional electricians. The model VC202 is sold by six distributors to retail stores in the United States. These distributors are located in Atlanta, Boston, Dallas and Los angles and have been selected to serve dissimilar region in the country.
The Model VC202 has been a steady seller over the years because of its reliability and rugged construction. Altavox does not consider this a seasonal product, but there is some variability in demand. Demand for the product over the past 13 weeks is shown in the following table.
1. Consider using a easy moving average model. Experiment with models using five weeks and 3 weeks past data. The past data in every region is give below. Evaluate the forecasts that would have been made over the past 13 weeks using the mean absolute deviation and tracking signal as criteria.
2. Next, consider using a easy exponential smoothing model. In your analysis, test 2 alpha values, .2 and .4. Use the similar criteria for evaluating the model as in part 1. Suppose that the initial previous forecast for the model using an alpha value of .2 is the past 3-week average. For the model using an alpha of .4 suppose that the previous forecast is the past five-week average.