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The Grand Tour Company had demand for an item for months January through September. Your manager needs to compare two forecasting strategies to see which
- The Grand Tour Company had demand for an item for months January through September. Your manager needs to compare two forecasting strategies to see which one performed better over time.
- Forecast April through September using a 3-month moving average.
Month | Actual | Month | Actual |
January | 110 | June | 180 |
February | 130 | July | 140 |
March | 150 | August | 130 |
April | 170 | September | 140 |
May | 160 |
- Use simple exponential smoothing with an alpha of 0.3 to estimate April through September, using the average of January through March as the initial forecast for April.
- Use MAD to decide which method produced the better forecast over the 6- month period, and advise your manager of the better method.
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