Absolute deviation as the performance criterion

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Reference no: EM132231011

Consider the sales data for computer success:

Month-sales

January-3000 July-6300

February-3400 August- 7200

March-3700 September-6400

April-4100 October-4600

May- 4700 November-4200

June-5700 December-3900

a) Use a 3-month weighted moving average to forecast the sales for the months April through December. Use weights of (4/8), (3/8) and (1/8), giving more weight to more recent data.

b) Use exponential smoothing with a= 0.6 to forecast the sales for the months April through December. Assume that the initial forecast for January was 3,200$. Start error measurement in April.

c) Compare the performance of the two methods by using the mean absolute deviation as the performance criterion, with error measurement beggining in April. Which method would you recommend.

d) Compare the performance of the two methods by using the mean absolute percent error as the performance criterion, with error measurement beggining in April. Which method would you recommend.

e) Compare the performance of the two methods by using the mean squared error as the performance criterion, with error measurement beginning in April. Which method would you recommend.

Reference no: EM132231011

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