Sunrise Baking Company markets doughnuts through a chain of food stores. It has been experienc- ing over- and underproduction because of forecasting errors. The following data are its demand in dozens of doughnuts for the past four weeks. Doughnuts are made for the following day; for example, Sunday's doughnut production is for Monday's sales, Monday's production is for Tuesday's sales, and so forth. The bakery is closed Saturday, so Friday's production must satisfy demand for both Saturday and Sunday.

Make a forecast for this week on the following basis: a Daily, using a simple four-week moving average.

b. Daily, using a weighted average of 0.40, 0.30, 0.20, and 0.10 for the past four weeks.

c. Sunrise is also planning its purchases of ingredients for bread production. If bread demand had been forecast for last week at 22,000 loaves and only 21,000 loaves were actually demanded, what would Sunrise's forecast be for this week using exponential smoothing with a = 0.10?

d. Suppose, with the forecast made in

c, this week's demand actually tums out to be 22,500. What would the new forecast be for the next week?

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4 WEEKS AGO 3 WEEKS AGO 2 WEEKS AGO LAST WEEK Monday 2,200 2,400 2,300 2,400 Tuesday 2,000 2,100 2,200 2,200 Wednesday 2,300 2,400 2,300 2,500 Thursday 1,800 1,900 1,800 2,000 Friday 1,900 1,800 2,100 2,000 Saturday Sunday 2,800 2,700 3,000 2,900