NAME: Jimenez, Ross John C.

Year-Course-Section: 3-BSMA-A

Assignment: Forecasting
Instruction: Analyze each problem and give what is asked. Round off your answers to 2
decimal places. NO NEED TO SHOW YOUR SOLUTIONS

Problem 1:
Auto sales at Carmen’s Chevrolet are shown below. Develop a 3-week moving average
from week 4 to 7. (Fill in the table)

Week Auto Sales Forecast

1 8 -

2 10 -

3 9 -

4 11 9

5 10 10

6 13 10

7 - 11.33

Problem 2:
Carmen’s decides to forecast auto sales by weighting the three weeks as follows:
(Copy the table above and fill in with your answers)

Weights Applied Period

3 Last week

2 Two weeks ago

1 Three weeks ago

6 Total

1
  Answer:

Week Auto Sales Forecast

1 8 -

2 10 -

3 9 -

4 11 9.17

5 10 10.17

6 13 10.17

7 - 11.67

Problem 3:
A firm uses simple exponential smoothing with   0.1 to forecast demand. The forecast
for the week of January 1 was 500 units whereas the actual demand turned out to be 450
units. Calculate the demand forecast for the week of January 8.
 𝑭𝒕 = 𝟒𝟗𝟓 𝒖𝒏𝒊𝒕𝒔

Problem 4:
Exponential smoothing is used to forecast automobile battery sales. Two value of  are
examined,   0.8 and   0.5. Evaluate the accuracy of each smoothing constant using
MAD. Which is preferable? (Assume the forecast for January was 22 batteries.) Actual
sales are given below:

Month Actual Battery Sales Forecast

January 20 22

February 21

March 15

April 14

2
 May 13

June 16

 Answer

Actual Absolute Forecast Absolute

Forecast
Month Battery Deviation with a = Deviation
with a =0.8
Sales with a = 0.8 0.5 with a = 0.5

January 20 22 2 22 2

February 21 20 1 21 0

March 15 21 6 21 6

April 14 16 2 18 4

May 13 14 1 16 3

June 16 13 3 15 1

∑ 𝑒= 15 ∑ 𝑒= 17

∑/𝑒/
MAD = 2.50 2.67
𝑛

Based on the table above, a smoothing constant of a = 0.8 is more preferred

than to that of a = 0.5 because it has a smaller MAD.

Problem 5:
Use the sales data given below to determine: (a) the trend line equation, and (b) the
predicted value for 2021 sales.

Year Sales (Units)

2014 100

3
 2015 110

2016 122

2017 130

2018 139

2019 152

2020 164

To minimize computations, transform the value of t (time) to simpler numbers. In this

case, designate year 2014 as year 1, 2015 as year 2, etc.
 Answer:

Year Time Period (t) Sales (Units) (y) t2 ty

2014 1 100 1 100

2015 2 110 4 220

2016 3 122 9 366

2017 4 130 16 520

2018 5 139 25 695

2019 6 152 36 912

2020 7 164 49 1148

∑ 𝑡 = 28 ∑ 𝑦 = 917 ∑ 𝑡 2 = 140 ∑ 𝑡𝑦 = 3961

b= 10.46; a= 89.16
a. 𝒚𝒕 = 89.16 + 10.46t
b. 𝒚𝟖 = 172.84 units

4
Problem 6:
Using the data in Problem 5, sales is expected to be 10% higher than the average in year
2021. Compute the forecasted demand for year 2021 adjusted for seasonality.
 𝐲𝟖 = 190.12 units

Problem 7:
Given the forecast demand and actual demand for 10-foot fishing boats, compute the
MSE.

Year Forecast Demand Actual Demand

1 78 71

2 75 80

3 83 101

4 84 84

5 88 60

6 85 73

 MSE = 265.20