The data below represent the demand for a new aftershave in a shop for each of the last 7 months.

Month 1 23 4 5 6 7

Demand 23 29 33 40 41 43 49

1. Forecast the demand by using a two-month moving average for months two to seven. What would be your forecast for the demand in month eight?

1. Apply exponential smoothing with a smoothing constant of 0.1 to derive a forecast for the demand in month eight. We assume that the forecasted value for the first month is 25.

1. Which of the two forecasts for month eight do you prefer and why?