Your company has the sales for year 1 below. You want to select from one of...

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Accounting

Your company has the sales for year 1 below. You want to selectfrom one of three models for forecasting: a three-month movingaverage, a weighted moving average (you believe that the weightsshould be 0.2, 0.3, and 0.5), and an exponential smoothing averagein which you use an alpha of 0.2 and an assumed forecast forJanuary of year one of $35,000. Determine sales forecast forJanuary year 2 and calculate MAD.

Jan Yr 1 34284
Feb 34000
Mar 31017
Apr 33406
May 34518
Jun 35469
Jul 35360
Aug 34894
Sep 34547
Oct 31015
Nov 31167
Dec 32925

A) Three-month moving average:
Sales forecast: $
MAD:

B) Weighted moving average:
Sales forecast: $
MAD:

C) Exponential moving average:
Sales forecast: $
MAD:

Which forecasting method should you use for your company? (enter A,B, C):

Answer & Explanation Solved by verified expert

4.5 Ratings (825 Votes)

Year1 Months Sales 3month Moving Average 3month Weighted Moving Average weights 02 03 05 Exponential Smoothing alpha 02 Jan 34284 Feb 34000 02342800834280 34280 Mar 31017 02340000834280 34224 Apr 33406 3428434000310173 33100 023428403340000531017 32562 02310170834224 33582 May 34518 3400031017334063 32808 023400003310170533406 32808 02334060833582 33547 Jun 35469 3101733406345183 32980 023101703334060534518 33484 02345180833547 33742 Jul 35360 3340634518354693 34464 023340603345180535469 34771 02354690833742 34088 Aug 34894 3451835469353603 See Answer

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