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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

  1. 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.
    1. 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

  1. 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.
  2. 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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