Calculate a forecast using exponential smoothing, Basic Statistics

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The Midwestern Manufacturing Company (MMC) is a large manufacturer of electrical generators.  The firm has experienced demand for their generators as shown below:

Year  Demand

2003      74

2004      79

2005      80

2006     90

2007    105

2008    142

2009    122

For the questions below, create EXCEL worksheets naming the tabs as indicated.

a. Calculate a forecast for 2010 using a 3 year moving average. Place your results in a worksheet tab named Q1.

b. Calculate a forecast for 2010 using exponential smoothing. Use .7 as your Alpha value. Place your results in worksheet tab Q1.

c. Using Mean Absolute Deviation as your criteria, determine which method performs best. Explain your decision. Place your results in worksheet tab Q1.


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