The manager of a computer store needs to make an accurate forecast of the demand for one particular personal computer (PC). If the manager does not order enough PC from the supplier, customers will buy the product from its competitors. The manager has collected the following demand data for the past 4 months:

Month (t)

Demand (Dt) for one particular PC

1

2

3

4

5

60

75

50

77

91

a) Compute a 3-month moving average forecast for months 4Answer

and months 5Answer

.

b)Compute a weighted 3-month moving average forecast for months 4Answer

and months 5Answer

. Assign weights of 0.5, 0.3, and 0.2 to the months in sequence, starting with themost recentmonth.

c) The computer store manager would like to select the appropriate forecasting method, with the criteria that large forecast error is not accepted in any one month, which measurement should be calculated for comparing the above two forecasting method?Answer

MAD

MAPE

MSE

d) According the measurement that you select in part c), compute the values for the 3-month moving average forecastAnswer

andweighted 3-month moving average forecast.Answer