Weekly sales of lamps at Cubicle Suppliers are shown in the table below.

i Compute a three-period moving average for weeks 5,6and 7.

ii Compute a four-period moving average for weeks 5, 6, and 7.

iii Compute a exponential forecast (using alpha = 0.1) for weeks 5, 6, and 7

iv Compute MAD for each forecast.

iii Which model is more accurate?

iv Forecast week 8 with the most accurate method.

Week Sales (cases)

1 17

2 21

3 27

4 31

5 19

6 17

7 21

8

Part b

A management analyst is using exponential smoothing to predict merchandise returns at an upscale branch of a department store chain. Given an actual number of returns of 154 items in the most recent period completed, a forecast of 172 items for that period, and a smoothing constant of 0.3,

i Determine the forecast for the next period?

ii How would the forecast be changed if the smoothing constant were 0.6? Explain the difference in terms of alpha and responsiveness.