=E

d. Using initial estimates of 120 for the average value and 10 for the trend, apply exponential smoothing with trend retrospectively to last year’s sales. Use all combinations of the smoothing constants where 0.1, 0.3, or 0.5 and 0.1, 0.3, or 0.5. Compare both MAD and MSE for these nine combinations.

e. Which one of the above forecasting methods would you recommend that management use? Using this method, what is the forecast of total sales for January of the new year?