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Question 3: PM computer services assembles customized personal computers from generic parts. Formed and operated by part time UMass Lowell students Paulette Tyler and Maureen
Question 3: PM computer services assembles customized personal computers from generic parts. Formed and operated by part time UMass Lowell students Paulette Tyler and Maureen Becker, the company has steady growth since it started. The company assembles computers mostly at night, using part time students. Paulette and Maureen purchase generic computer parts in volume at a discount from a variety of sources whenever they see a good deal. Thus, they need a good forecast of demand for their computers so that they will know how many parts to purchase and stock. they have complied demand data for the last 12 months as reported below. Month Demand 31 January 34 February 36 March 35 April May 40 June 47 49 July August 42 September 53 October 46 November 52 December 50 a. Make forecasts for the sales using 3-period moving average method. b. Use the exponential smoothing method with a=0.3 as a smoothing constant to forecast the sales. Assume that the initial forecast for January is 33. c. Calculate the error and the absolute error for each forecast and summarize your computations in the table below. d. Compute the MAD as an accuracy measure for evaluating the performance of forecasting method then decide which forecasting method provides a better forecast? Explain e. Use the better of the two methods to forecast sales for January. Month Sales 3-Month Error Absolute Square Exponential Error Absolute Square Moving error error Smoothing with error erro Average a=0.3 (Y) (F) (F) January February March April May June July August September October November December
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