Situation: The "Small Town Restaurant" uses a forecast of weekly sales revenue to plan their inventory ordering and staffing for the upcoming week. They have been using a regression forecast for the past year and wonder if it is the most accurate method. You have been brought in to determine if another forecasting technique would be more accurate. Data for their weekly sales for the past year is below: Week Revenue $ 2,899 27 Week 14 15 16 28 29 30 17 Week 1 2 3 4 5 6 7 8 9 10 11 12 13 Revenue $ 3,157 $ 3,016 $ 3,062 $ 3,074 $ 3,002 $ 3,054 $ 3,002 $ 2,984 $ 3,078 $ 3,010 $ 3,148 $ 3,146 $ 3,198 18 19 20 Revenue $3,157 $3,016 $3,019 $ 3,045 $3,046 $ 3,157 $3,016 $ 3,078 $ 2,984 $3,002 $3,054 $3,002 $ 2,941 31 32 33 34 $ 2,942 $3,062 $3,074 $ 3,013 $3,067 $3,148 $3,146 $3,198 $3,082 $3,146 $3,150 $3,221 Week 40 41 42 43 44 45 46 47 48 49 50 51 52 Revenue $ 3,298 $ 3,201 $ 3,156 $ 3,017 $ 3,156 $ 3,097 $ 2,978 $3,120 $ 3,156 $ 3,048 $ 2,948 $ 2,840 $ 2,921 23 24 25 26 36 37 38 39 $ 159,532 Annual total Small Town Restaurant Weekly Revenue Revenue $3,400 $3,300 $3,200 $3,100 $3,000 $2,900 $2,800 $2,700 $2,600 hohrom 1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 Week Moving Average Forecast What is the equation for a moving average forecast? Demand in Previous n Periods MA= Calculate the three week moving average forecast for week 4 and 5 for the data provided. What happens if we use more time periods in our moving average forecast? Determine the three week moving average forecast for week 53. Exponential Smoothing Forecast What is the equation for a forecast using exponential smoothing? F1+1 = Fi+a (Dt- E.) Using an alpha of 0.50, calculate the exponential smoothing forecast for week 4 and 5 for the data provided. Use $3,086.50 as the forecast for week three. What happens if we use a larger alpha value in our exponential smoothing forecast? Determine the exponential smoothing forecast for week 53. Use an alpha of 0.50, and $2,927.92 as the forecast for week 52