18. Franklin Tooling, Inc., manufactures specialty tooling for firms in the paper-making industry. All of their products are engineer-to-order and so the company never knows exactly what components to purchase for a tool until a customer places an order. However, the company believes that weekly demand for a few components is fairly stable. Component 135.AG is one such item. The last 26 weeks of historical use of component 135.AG is as follows:

Week / Demand / Week / Demand

1 / 137 / 14 / 131

2 / 136 / 15 / 132

3 / 143 / 16 / 124

4 / 136 / 17 / 121

5 / 141 / 18 / 127

6 / 128 / 19 / 118

7 / 149 / 20 / 120

8 / 136 / 21 / 115

9 / 134 / 22 / 106

10 / 142 / 23 / 120

11 / 125 / 24 / 113

12 / 134 / 25 / 121

13 / 118 / 26 / 119

Use Excel to evaluate the following forecasting methods. Start error measurement in the fifth week, so all methods are evaluated over the same time interval. Use the default settings for initial forecasts.

a) a three-period moving average

b) a three-period weighted moving average forecast with weights of 0.65, 0.25, and 0.1

c) an exponential smoothing forecast, using a starting forecast of 135 for week one and an a = 0.30.

d) Which forecasting method should management use, if the performance criterion it chooses is:

1) MSE

2) MAD

3) MAPE