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Exponential smoothing with smoothing constants

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The following table shows the capacity required (in thousands of unspecified units) for the production of an Online service over the next 18 months.

Month       1    2    3    4    5    6    7    8    9   10   11   12   13  14  15   16   17  18

Demand  25  30  32  33  32  31  30  29  28  28   29    31   30  32  33   32   34  35

  1. Based on MAD, which model is better, a 6 month or a 4 month moving averages? Based on your selection, what is the forecast for month 25?
  2. Based on MAD, which model is better, an exponential smoothing with smoothing constants of 0.7 or 0.8? Based on your selection, what is the forecast for month 25?
  3. Does a linear regression model is better than any of the previous (four) models? Explain.

Reference no: EM131114728

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