Operations Management

Question

Sales for the past 8 months at Dalworth Company are given here.

 

Month

Sales ($ Millions)

Jan

20

Feb

24

Mar

27

Apr

31

May

37

Jun

47

July

53

August

62

 

  • Use a 3-month weighted moving average to forecast the sales for June, July, and August. Use weights of (10), (5), and (1), giving more weight to more recent data.
  • Use exponential smoothing with  forecast the sales for June, July, and August. Assume that the forecast for May was $39 million.
  • Calculate the Mean Absolute Percent Error (MAPE) for each of the two forecasting methods: 3-month weighted moving average and exponential smoothing, for each month (June, July, and August). Based on these calculations, identify which method provided a more accurate forecast for each month. Be sure to show all error measurements.

 

 

 

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