ACTIVITY 1 IN FORECASTING

Name: Sandig, Faye Arlene Ninez G. Date: May 30, 2022

Course: Production and Operations Management Professor: Dr. Jay Sario

1. The Beta automobile dealer in Quezon Avenue area wants to accurately forecast
demand for the Beta special edition car during the next month. Because the distributor
is in Korea, it is difficult to send cars back or reorder if the proper number of cars is not
ordered a month ahead. From sales records, the dealer has accumulated the following
data for the past year.

Month Cars
(Demand)
(Past Yeas)

January 60

February 70

March 50

April 90

May 10

June 80

July 150

August 70

September 110

October 150

November 130

Required:
A. Compute the three and five-month moving average forecast of demand.
3-month moving 5-month moving
average average
April 60
May 70
June 50 56
July 60 60
August 80 76
September 100 80
October 110 84
November 110 112
December 130 122

B. Determine the weighted moving average.

 Weighted
moving average Weighting Factor
January 1 0.02
February 2 0.03
March 2 0.05
April 5 0.06
May 1 0.08
June 7 0.09
July 16 0.11
August 8 0.12
September 15 0.14
October 23 0.15
November 22 0.17
Weighted moving
average 103
2. Given the following demand for a ten-period time frame.

Period Units
Demanded Per
Period

1 24

2 25

3 28

4 32

5 35

6 48

7 41

8 46

9 49

10 53

a. Compute the three-period moving average forecast for periods 4 through 11.
3-month moving
average
4 26
5 28
6 32
7 38
8 41
9 45
10 45
11 49

b. Compute the five-period moving average forecast for periods 6 through 11.
5-month moving
average
4
5
6 29
7 34
8 37
9 40
10 44
11 47
c. Compute the Weighted Moving Average (WMA)
Weighted
moving average Weighting Factor
1 0 0.018181818
2 1 0.036363636
3 2 0.054545455
4 2 0.072727273
5 3 0.090909091
6 5 0.109090909
7 5 0.127272727
8 7 0.145454545
9 8 0.163636364
10 10 0.181818182
11 43

d. Tabulate the actual demand and the forecasts determined in part a to c on the
same table and compare them.
Three-month Moving Average Five-month Moving Average Weighted Moving Average
Units Demanded
Period Per Period Forecast % Difference Forecast % Difference Forecast % Difference
1 24 0% 0% 43 -44%
2 25 0% 0% 43 -42%
3 28 0% 0% 43 -35%
4 32 26 25% 0% 43 -26%
5 35 28 24% 0% 43 -19%
6 48 32 52% 29 67% 43 12%
7 41 38 7% 34 22% 43 -5%
8 46 41 11% 37 25% 43 7%
9 49 45 9% 40 21% 43 14%
10 53 45 17% 44 21% 43 23%
11 49 -100% 47 -100% 43 -102%

e. Give your forecasting analysis.

In the three-month moving average forecast the actual demand is higher than the
forecast in period 4-10. Same observation is true with the five-month forecast of
which demand is higher from period 6-10. Comparing the methods, for period 11,
the most conservative to use is the weighted moving average.