Sales for the past 12 months at Dalworth Company are given here.

a. Use a three-month moving average to forecast the sales for the months April through December.
b. Use exponential smoothing with a = 0.6 to forecast the sales for the months April through December. Assume that the initial forecast for January was $22 million. Start error measurement in April.
c. Compare the performance of the two methods by using the mean absolute deviation as the performance criterion, with error measurement beginning in April. Which method would you recommend?
d. Compare the performance of the two methods by using the mean absolute percent error as the performance criterion, with error measurement beginning in April. Which method would you recommend?
e. Compare the performance of the two methods by using the mean squared error as the performance criterion, with error measurement beginning in April. Which method would you recommend?

Transcribed Image Text:

SALES (S MILLIONS) MONTH January February March April May June SALES (S MILLIONS) 20 24 27 31 37 47 MONTH July August September October November December 53 62 54 36 32 29