General Motors (GM) is one of the world’s largest car and truck manufacturer and employs over 200,000 employees worldwide. In 1970, GM had captured nearly 60% of the U.S. market share. However, due to increased global competition over the past 40 years, GM’s market share has eroded to less than 18% in 2012. The following data show GM’s U.S. market share from 2004 until 2012. These data can also be found in the Excel file GM market share.xlsx.

Year Market Share

(%) Year Market Share

(%)

2004 26.2 2009 19.7 2005 33.0 2010 18.8 2006 27.3 2011 19.4 2007 22.1 2012 17.9 2008 22.1

a. Forecast the U.S. market share for GM in 2013 using two-period weighted moving average with weights 3 and 1.

b. Calculate the MAD for the forecast in part a.

c. Forecast the U.S. market share for GM in 2013 using exponential smoothing with a = 0.7.

d. Calculate the MAD for the forecast in part c.

e. Which forecast do you have most confidence in? Why?AppendixLO1