question 2

forecast

actual demand

error

4Q 2017

220

1Q 2018

215

2Q 2018

210

3Q 2018

220

4Q 2018

225

1Q 2019

240

2Q 2019

255

3Q 2019

260

4Q 2019

270

1Q 2020

1. Using the 3 quarter moving average: What is the forecast for 3Q 2019, 4Q 2019, 1Q 2020

2. Compute the forecast for3Q 2019, 4Q 2019, 1Q 2020 using exponential smoothing

with a smoothing factor of .65

3. Which forecast method provides a more accurate forecast?

4. Compute the forecast for 3Q 2019, 4Q 2019, 1Q 2020 using a 3 quarter weighted moving average with the

most recent data weighted at .6; the second most recent data weighted at .3;

and the third most recent data weighted at .1

5. Compare the results from 4 to the results from 1 and 2. Now which forecast provides the more

accurate forecast?

6. If the exponential smoothing is calculated using a smoothing factor of .3 will the forecast error

become smaller?