Answer:
a. 204
b. 161
c. 169.008
Explanation:
Data
ACTUAL
June 134
July 174
August 204
a. Using a simple three-month moving average, what is the forecast for September?
Simple three month moving average is given by summation or ACTUAL/Number of Months
= (134 + 174 + 204)/3
= 612/3
= 204
b. Using a weighted moving average, what is the forecast for September with weights of 0.40, 0.50, and 0.10 for June, July, and August, respectively?
Using weighted moving average
Forecast = 0.4(June) + 0.5(July) + 0.1(August)
= 0.4 * 134 + 0.5 * 174 + 0.1 * 204
= 161
c. Using single exponential smoothing and assuming that the forecast for June had been 122, forecast sales for September with a smoothing constant α of 0.40.
We start by calculating expected forecast of July then August and finally, September.
This is given by
F, July = F,June + α(A, June - F, June)
F, July = 122 + 0.4(134 - 122)
F, July = 126.8
F, August = F,July + α(A, July - F, July)
F, August = 126.8 + 0.4(174 - 126.8)
F, August = 145.68
F, September = F, August + α(A, August - F, August)
F, September = 145.68 + 0.4(204 - 145.68)
F, September = 169.008