The actual demand data for an item at a local retailer during the past six weeks...

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Operations Management

The actual demand data for an item at a local retailer
during the past six weeks are shown below:
WEEK
ACTUAL DEMAND
(number of units)
Six weeks ago
202
Five weeks ago
201
Four weeks ago
199
Three weeks ago
200
Two weeks ago
203
One week ago
198
THIS WEEK
ACTUAL DEMAND NOT KNOWN
Determine the demand forecast for THIS WEEK using each of thefollowing methods:
a. A 3-week moving average.
[3]
b. A 4-week weighted moving average using weights of 15, 5, 3,and 2 for one week ago, two
weeks ago, three weeks ago, and four weeks ago, respectively.(
Hint
: the higher weights
are applied to the more recent time periods.)
c. Exponential smoothing using the following: smoothingconstant,
Î±
= 0.4 and the demand
forecast for three weeks ago = 199 units.

Answer & Explanation Solved by verified expert

4.1 Ratings (440 Votes)

a A 3periods moving averagemethod averages the actual value for the previous three periods togenerate the forecast for the next period This can be calculatedas the sum of the actual value for the previous three periods See Answer

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