Calculate the mad for this model

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Reference no: EM1334946

The actual sales (demand in thousand units) for 2003, 2004, 2005, 2006, and 2007 are: 1975, 2150, 2580, 3700, and 4920.

(A) Use 3-period weighted moving average with the weights of 0.2, 0.3, and 0.5 to forecast the sales of 2008.

(B) Use simple exponential smoothing technique with smoothing constant of 0.3 to forecast the sales of 2008, given the forecast for 2006 has been 3330. [Hint: Use the forecast for 2006 to figure out the forecast for 2007 and then use that forecast to find out the forecast for 2008.]

(C) Use 3-period moving average to forecast the sales of 2008. What is the forecast? What is the MAD for this model?

(D) Use the following trend model to forecast the sales of 2008. To obtain the trend model, 2003 was entered into the computer as Period 1, 2004 as Period 2, 2005 as Period 3, 2006 as Period 4, .. etc.

Sales = 1100 + 950 * Period

Reference no: EM1334946


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