Question
Toyota Motors introduced a hybrid car Hybrid G in the U.S. market in 2014. In the first three years, the sales of the Hybrid G
Toyota Motors introduced a hybrid car Hybrid G in the U.S. market in 2014. In the first three years, the sales of the Hybrid G were strong, but the sales figures started to decline in 2017 following the introduction of a new hybrid model by Honda. Toyota is in critical need of a better forecasting method. They need your help to evaluate possible forecasting methods and provide suggestions. The following table contains the past 12 months of sales data. Month Sales 1 1,243 2 1,358 3 1,342 4 1,298 5 1,277 6 1,183 7 1,053 8 992 9 852 10 910 11 823 12 744 a. Using simple exponential smoothing, compute two sets of forecasts for the sales of Hybrid G for months 2 to 13, corresponding to values of 0.5 and 0.7. Assume that the forecast for Month 1 is 1,243. Report your forecasts in a table. (5 points) b. Calculate the Mean Absolute Deviation (MAD) and the Mean Absolute Percent Error (MAPE) for both forecasts. (4 points) c. Which value seems the most appropriate? Please explain why. (4 points)
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