DIZON, Mary Jane S.

A-331
Assignment on Forecasting

3-WEEK MOVING AVERAGE

Period Actual Demand Forecast Absolute

Error
Jan 200.00
Feb 256.00
Mar 287.00
Apr 282.00 247.67 34.33
May 247.00 275.00 28.00
June 252.00 272.00 20.00
July 260.33
Total 1524.00 1055.00 82.33
Mean Absolute Error 27.44
(MAD)

EXPONENTIAL SMOOTHING, ALPHA = 0.10

Perio Actual Forecas Absolute
d Demand t Error
Jan 200.00    
Feb 256.00 200.00 56.00
Mar 287.00 205.60 81.40
Apr 282.00 213.74 68.26
May 247.00 220.57 26.43
June 252.00 223.21 28.79
July   226.09  
Total 1524.00 1289.20 260.88
Mean Absolute Error
(MAD)   52.18

LINEAR TREND
Actual demand
Period x (y) xy x^2
Jan 1.00 200.00 200.00 1.00
Feb 2.00 256.00 512.00 4.00
Mar 3.00 287.00 861.00 9.00
Apr 4.00 282.00 1128.00 16.00
May 5.00 247.00 1235.00 25.00
June 6.00 252.00 1512.00 36.00
Total 21.00 1524.00 5448.00 91.00
DIZON, Mary Jane S. A-331
Assignment on Forecasting

Answer the following question. Use your solution above in answering.

1. What is your forecast for week 7 using 3 month moving average? 260.33

2. What is your forecast for week 7 using exponential smoothing? 226.09

3. Which is the better forecasting technique for the data, moving average or exponential
smoothing?

The 3-month moving average since it has a lower Mean Absolute Error (MAD).

4. Using the 3-month moving average, what period did your forecast start? April

5. If 4 month moving average is used, what period must you start your forecast? May

6. In exponential smoothing, to what did you multiply the alpha of 0.10, actual demand
or forecast? Actual Demand

7. Given weights of 0.40 (most recent), 0.20,0.20 and 0.20 for the preceding periods
respectively, what is the forecast for week 7 using weighted moving average?

= 0.40 (252) + 0.20 (247) + 0.20 (282) + 0.20 (287) = 264

8. What is the linear trend equation?

b = [6(5,448) – (21)(1,524) / [6(91) – (21)^2] = 6.51

a = [1,524 – (6.51 x 21)] / 6 = 231.22
Y = 231.22 + 6.51X

9. What does your slope (b) indicate, increasing or decreasing demand?

Since it’s positive, the slope indicates increasing demand.

10. Using linear trend, what is the forecast for week 7?

Y = 231.22 + 6.51(7) = 276.79