Forecasts: application exercisesInstructions

Quantitative methods of forecasting, in particular the simple moving average and the seasonal multiplicative method.

You are the operations manager at Servicios de Salud, Inc., a company that provides care services to the elderly. An important aspect of your job is ensuring care centers have a healthy inventory of nutritional drinks for residents. Below is the historical demand for the product for one year:

Month	historical demand	forecast demand
January	1600
February	1900
March	1800
April	1400	?
May	1450	?
June	1360	?
July	2040	?
August	1800	?
September	2260	?
October	2600	?
November	2850	?
December	2530	?

A. Use the three-month simple moving average to forecast sales for the months of April through December.

B. Based on the results of this exercise for the first five months of demand for these products, evaluate how effective the calculated forecast is.