Franklin Tooling, Inc., manufactures specialty tooling for firms in the paper-making industry. All of its 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 past 26 weeks of historical use of component 135.AG is as follows:

Use OM Explorers Time Series Forecasting Solver 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.

Nave (one-period moving average)

Three-period moving average

Exponential smoothing, with

Trend projection with regression

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

CFE?

MSE?

MAD?

MAPE?

Provide forecasts using only the following forecasting methods:a) a three-period moving averageb) a three-period weighted moving average forecast with weights of 0.7, 0.2, and 0.1c) an exponential smoothing forecast, using a starting forecast of 140 for week one and an =0.25

Answer only question v) for only the following three performance criterion: 1) MSE, 2) MAD, and 3) MAPE.

Summary: Forecasting