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

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?

Transcribed Image Text:

MONTH SALES (IN THOUSANDS) 11 Jan. Feb. March April May June July 14 16 10 15 17 11 MONTH Aug. Sept. Oct. Nov. Dec. Jan. SALES (IN THOUSANDS) 14 17 12 14 16 11