4.38 Sales of industrial vacuum cleaners at Larry Armstrong Supply Co. over the past 13 months are shown below:

MONTH SALES (IN THOUSANDS)

Jan.

11 Feb.

14 March 16 April 10 May 15 June 17 July 11 MONTH SALES (IN THOUSANDS)

Aug.

14 Sept.

17 Oct.

12 Nov.

14 Dec.

16 Jan.

11

a) Using a moving average with three periods, determine the demand for vacuum cleaners for next February.

b) Using a weighted moving average with three periods, determine the demand for vacuum cleaners for February. Use 3, 2, and 1 for the weights of the most recent, second most recent, and third most recent periods, respectively. For example, if you were forecasting the demand for February, November would have a weight of 1, December would have a weight of 2, and January would have a weight of 3.

c) Using MAD, determine which is the better forecast.

d) What other factors might Armstrong consider in forecasting sales?