Question

A small company gathered sales data over the last 7 months as follows: Month January February March April May June July August Sales 270 264 216 288 249 222 219 Download CSV Do not round answers. a) What is the 3-month moving average forecast for July? b) What is the 2-month weighted moving average forecast for July using weights 4 and 17 Assign higher weight to the most recent period. c) Given that the exponentially smoothed forecast for February is 270, what is the simple exponential smoothing forecast for March with a 0.52 Actual sales for a product was 75 in February, 72 in March, and 82 in April it sales forecast for March is 73, what is the exponential smoothing forecast (with a Do not round your results. 0.1) for May! Forecast for May -

Answer 1

The 3-month moving average forecast for July is 253. The 2-month weighted moving average forecast for July is 242.71. The simple exponential smoothing forecast for March is 168.60. The exponential smoothing forecast for May is 73.90.

Step-by-step explanation:

a) To find the 3-month moving average forecast for July, we need to average the sales data for April, May, and June. The average is (288 + 249 + 222) / 3 = 253.

b) To find the 2-month weighted moving average forecast for July, we need to multiply the sales data for June by a weight of 4, and the sales data for May by a weight of 17. Then, we add these weighted values and divide by the sum of the weights (4 + 17 = 21). The forecast is (222*4 + 249*17) / 21 = 242.71.

c) To find the simple exponential smoothing forecast for March with a 0.52, we use the formula: forecast = previous forecast + alpha * (actual - previous forecast). As the previous forecast for February is 270 and the actual sales for February is 75, the forecast for March is 270 + 0.52 * (75 - 270) = 270 + 0.52 * (-195) = 270 - 101.40 = 168.60.

d) To find the exponential smoothing forecast for May with a 0.1, we use the formula: forecast = previous forecast + alpha * (actual - previous forecast). As the previous forecast for April is 73 and the actual sales for April is 82, the forecast for May is 73 + 0.1 * (82 - 73) = 73 + 0.1 * 9 = 73 + 0.9 = 73.90.