Question
Among other services and products that Karl's Copiers provides, it sells and repairs photocopy machines. It is now the end of December, 2022 and the
Among other services and products that Karl's Copiers provides, it sells and repairs photocopy machines. It is now the end of December, 2022 and the manager needs to plan his service staffing for January, 2023. The manager first needs to forecast the number of service calls for January, 2023. Following is the record of service calls for the past 12 months.
Month | Number of Service Calls | Month | Number of Service Calls |
January | 30 | July | 31 |
February | 24 | August | 38 |
March | 27 | September | 37 |
April | 31 | October | 36 |
May | 37 | November | 32 |
June | 34 | December | 29 |
You have been asked by the manager to help with the forecast for January, 2023. He has asked you to provide forecasts for January using the following three methods:
- Moving Average
- Weighted Moving Average
- Exponential Smoothing
He has also asked you to determine which of these three forecasts he should select. To make this assessment, he has asked that you compare the actual number of service calls to what the forecasts would have been for September through December, 2022 using each of the three methods.
i) For the moving average, use a four-month moving average.
ii) For the weighted moving average, use a three-period weighted moving average with a weight of 0.75 for the most recent month and 0.15 for the next most recent month and the remaining weight(s) consistent with this forecasting method as we applied it.
iii) For exponential smoothing, use an = 0.30, and using a starting forecast for July, 2022 of 33.
a) Create a forecast for January, 2023 using each of the three methods.
b) Recommend which of these three methods the manager should use for January, 2022 based on the results of evaluation of the forecasts for October through December, 2022. Your selection criteria must be based on one of the numerical evaluation methods we have learned and used this term. Only saying "it is the easier method" is not acceptable.
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