The demand for a product in each of the last four weeks is shown below.

Week

Demand of the product

1

23

2

27

3

34

4

40

(a) What demand of the product would you predict for week 5, using a weighted moving average with weights of 0.5 for the immediate preceding week (e.g. week 4) and 0.3, 0.15, and 0.05 for the three weeks before that?

(b) Apply exponential smoothing with a smoothing constant of 0.7 to generate a forecast for the demand for this product in week 5.

Problem 4. (Forecasting)

Sales of a particular product (in millions of dollars) for the years 2016 through 2019 have been $48, $64, $83 and $96, respectively.

(a) What sales would you predict for 2020, using a simple four-year moving average?

(b) what sales would you forecast for 2020, using the simple regression (least squares) method?