Question $3$

Analyst at Ayamas Food Corporation Sdn$.$ Bhd$.$ company about forecasting monthly demand for

inventory from warehouse. The analyst suggest that Ayamas consider using exponential

smoothing with smoothing constants $0\mathrm{.}2$ and $0\mathrm{.}3.$ Ayamas decides to compare the accuracy of

the smoothing constants for the most recent second quarter of the year. Below is the data for the

most recent quarter.

a$)$ Calculate the exponential smoothing forecast for periods January to June. Use $a=0\mathrm{.}2$ and $a$

$=0\mathrm{.}3$

b$)$ Calculate the mean absolute deviation $($MAD$)$ for the forecast. Based on MAD, which

forecasting method is the best.

$(4$ Marks$)$

c$)$ Forecast July use the smallest mean absolute deviation.

$(2$ Marks$)$

$[$Total: $20$ Marks$]$