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Forecasting Activity

Exponential smoothing provided a better forecast than the 3-month moving average for the given demand data. Exponential smoothing multiplied the alpha of 0.10 by the actual demand to produce forecasts of 226.09 for July, while the 3-month moving average forecast was 260.33. A linear time series regression of the data found a trend equation of y=231.20 + 6.51x.

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34 views

Forecasting Activity

Exponential smoothing provided a better forecast than the 3-month moving average for the given demand data. Exponential smoothing multiplied the alpha of 0.10 by the actual demand to produce forecasts of 226.09 for July, while the 3-month moving average forecast was 260.33. A linear time series regression of the data found a trend equation of y=231.20 + 6.51x.

Uploaded by

abibi
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as XLSX, PDF, TXT or read online on Scribd
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Exponential Smoothing here. Alpha= 0.

10 3-month moving average here…

Actual Absolute (AE/ Absolute (AE/


Period Forecast Error^2 Forecast Error^2
Demand Error AD)*100 Error AD)*100

Jan 200
Feb 256 200 56 3136 21.88
March 287 205.6 81.40 6625.96 28.36
April 282 213.74 68.26 4659.43 24.21 247.67 34.33 1178.78 12.17
May 247 220.57 26.43 698.76 10.70 275 28 784 11.34
June 252 223.21 28.79 828.90 11.42 272 20 400 7.94
July 226.09 260.33
Total 260.88 15949.04 96.57 Total 82.33 2362.78 31.45
MAD 52.18 MAD 27.44
MSE 3189.81 MSE 787.59
MAPE 19.31 MAPE 10.48

1. What is your forecast for July using 3 month moving average? 260.33
2. What is your forecast for July using exponential smoothing? 226.09
3. Which is the better forecasting technique for the data, moving Exponential Smoothing
4. Using the 3 month moving average, what period did your forecast April
5. If 4 month average is used, what period must you start? May
6. In a exponential smoothing, to what did you multiply the alpha of .10, Actual Demand
actual demand or forecast?
7. What is the linear trend equation? y=231.20 + 6.51x
Time Series Regression here…
Actual
Period x Demand xy x²
(y)
Jan 1 200 200 1
Feb 2 256 512 4
March 3 287 861 9
April 4 282 1128 16
May 5 247 1235 25
June 6 252 1512 36
Total 21 1524 5448 91
slope b? 6.51
a-intercept? 231.20

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