Aquasoft sells water purifiers from its only store in Ion Orchard. The record of sales transaction for the year 2019 is shown in Table 1. The company wants to forecast monthly sales for 2020 based on the sales for water purifiers in 2019.Aquasoft sells water purifiers from its only store in Ion Orchard. The record of sales transaction for the year 2019 is shown in Table 1. The company wants to forecast monthly sales for 2020 based on the sales for water purifiers in 2019.

The operations manager is confused whether to use moving average or exponential smoothing method for forecasting. Suggest to the operations manager the better method.

In your answer, plot a graph to show the demand over time and comment on the demand pattern. Examine the demand forecast using three-month and four-month moving averages. For exponential smoothing, use smoothing constant of 0.1 to 0.3 with initial value of 200 to forecast demand. Show how you derive the forecast and errors of forecast. Give reasons to support your recommendation.

Table 1: 1 Record of Transactions in 2019 Month Sales Unit Selling Quantity Price January 200 $100 February 200 $100 March 125 $110 75 $120 April 75 $100 125 $110 May 250 $115 Jun 100 $110 150 $110 July 75 $120 75 $125 50 $120 August 200 $125 September 200 $130 October 250 $135 November 100 $140 December 100 $145 50 $150 Table 1: 1 Record of Transactions in 2019 Month Sales Unit Selling Quantity Price January 200 $100 February 200 $100 March 125 $110 75 $120 April 75 $100 125 $110 May 250 $115 Jun 100 $110 150 $110 July 75 $120 75 $125 50 $120 August 200 $125 September 200 $130 October 250 $135 November 100 $140 December 100 $145 50 $150