Problem 4:

Milner Brewing Company experienced the following monthly sales (in thousands of barrels) during 19X1:

Jan Feb Mar Apr May June

100 92 112 108 116 116

(a)Develop 2-month moving average forecasts for March through July.

(b)Develop 4-month moving average forecasts for May through July.

(c)Develop forecasts for February through July using the exponential smoothing method (with w

1. = .5). Begin by assuming ^Yt+1 = Yt.

d)What value of w would you choose? Explain.

(e)Explain the differences of parts (a) and (b).