Question
Mikaela sells homemade pies to many local cafes in Wollongong. She keeps a record of the sales of homemade pies to help her with demand
Mikaela sells homemade pies to many local cafes in Wollongong. She keeps a record of the sales of homemade pies to help her with demand forecasting. The price of a single pie is $4.80. Mikaela has been using a 3-week moving average forecasting model to forecast the demand for a week. The Actual demand column displays the actual number of pies sold in the week, whereas the Forecast column shows the forecasts Mikaela has obtained by using the 3-week moving average forecasting model.
Week | Actual demand | Forecast (3-week moving average) |
1 | 438 | |
2 | 420 | |
3 | 414 | |
4 | 318 | 424 |
5 | 306 | 384 |
6 | 240 | 346 |
7 | 240 | 288 |
8 | 216 | 262 |
9 | 198 | 232 |
10 | 225 | 218 |
11 | 270 | 213 |
12 | 315 | 231 |
1.Mikaela wants tomakethe forecasts more accurate. For that, she wants to use eitheran exponential smoothing forecasting model with = 0.20 or a 4-week moving average with weights 0.20, 0.50, 0.05, and 0.25. Which of the three forecasting models should she adopt? Why?
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