10. The following two demand sets are to be used to test two different basic exponential smoothing models. The first model uses α = 0.1, and the second uses α = 0.5. In both cases, the model should be initialized with a beginning forecast value of 50; that is, the ESF forecast for period 1 made at the end of period 0 is 50 units. In each of the four cases (two models on two demand sets), compute the average forecast error and MAD. What do the results mean?

Transcribed Image Text:

Demand Set I Demand Set II Demand Period Demand Period 1 51 1 77 2 46 2 83 3 49 3 90 4 55 4 22 5 52 5 10 67 47 6 80 51 7 16 8 48 8 19 9 56 9 27 0 1 2 3 10 51 10 79 11 45 11 73 12 52 12 88 13 49 13 15 14 48 14 21 15 43 15 85 16 46 16 22 17 55 17 88 18 53 18 75 19 54 19 14 20 49 20 16