Question
The spreadsheet Question 1-Assignment 1.xlsx (uploaded to Demand Management (Forecasting) module of Canvas) has data for the past 30 weeks of sales for product X.
The spreadsheet "Question 1-Assignment 1.xlsx" (uploaded to "Demand Management (Forecasting)" module of Canvas) has data for the past 30 weeks of sales for product X. Based on the data, do the following questions. [If you use Excel to solve this question, submit the excel file along with your solutions to the assignment. Note that you need to explain your answers to the following questions in detail, and just submitting the calculations done by excel is not enough.] (a) Plot the data. Just by looking at the plot, do you think a 3-week simple moving average would be a better forecast, or a 6-week simple moving average? Just by looking at the plot, do you think an exponential smoothing with value of = 0.2 would be better forecast or would = 0.6 be better? Explain your reasoning. (b) Which one of the four possible forecasts mentioned in part (a) (3-week and 6-week simple moving average and exponential smoothing with value of = 0.2 and = 0.6) is the best forecast? Justify your answer by calculating (Mean Absolute Deviation) MAD and (Mean Squared Error) MSE. According to the chosen forecasting method, what will be the forecast of sales during Week 31? (c) Now, assume that we want to fit the best Linear trend to the data to estimate the average demand change every week considering it. Fit this line to the data, and add it to the plot of part How much is the average demand change every week according to it? Compare the forecasting performance of this method to the answer you got at part (b). (Remark: For some of the above parts, different people could reach different conclusions, but you need to give good reasons for your conclusions.)