RAP Computers assembles personal computers from generic parts it purchases at a discount, and it sells the units by phone orders it receives from customers responding to the company’s ads in trade journals. The business has developed an exponential smoothing forecast model to forecast future computer demand. Actual demand for the company’s computers for the past 8 months as well as a forecast is shown in the following table:

Month Demand Forecast March 120 —

April 110 120.0 May 150 116.0 June 130 129.6 July 160 129.7 August 165 141.8 September 140 151.1 October 155 146.7 November — 150.0

a. Using a measure of forecast accuracy of your choice, ascertain whether the forecast appears to be accurate.

b. Determine whether a 3-month moving average would provide a better forecast.

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