9. Use a spreadsheet program to compare a three-period moving-average forecasting model with a basic exponential smoothing model (ESF). Ten periods of past actual demand data are available (27, 26, 32, 41, 28, 35, 43, 47, 28, and 38). Use the first five periods’ data to seed the model (as described next) and the last five periods to test the model.

a. Use the average of the first five periods to seed the ESF model (i.e., the “past forecast”) and a smoothing model with α = 0.3. Compare this ESF model with a three-period moving average model using the last five periods of data. Use MAD as the criterion for comparing the techniques.

b. Does your comparison change if you use the past three periods’ data to seed the ESF model? What is the best alpha (smoothing) value to use for this model?