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Forecasting: Moving Average, Weighted Average, Exponential

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Your Director of Supply Chain needs help in developing forecasts. Choose one of the following three options.

Develop forecasts for periods 6 through 24 using MA with 3 periods, 4 periods, and 5 periods,

or...

Develop forecasts for periods 3 through 24 using a smoothing factor of 0.2 and 0.3,

or...

Develop forecasts for periods 5 through 24 using weighted moving average with weights of 0.4, 0.3, 0.2, and 0.1.

Calculate the MAD and MSE for all of your forecasts. Start MAD and MSE calculations for moving averages in period 6. Start MAD and MSE calculations for exponential smoothing in period 5. Start MAD and MSE calculations for Weighted Averages in period 5.

Period Actual Quantity
1 429
2 222
3 276
4 167
5 266
6 305
7 430
8 415
9 388
10 368
11 220
12 457
13 267
14 277
15 242
16 590
17 147
18 566
19 267
20 361
21 338
22 351
23 217

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Solution Summary

Moving Average, Weighted Average, Exponential methods are used for forecasting. MAD (Mean Absolute Deviation), MSE are calculated for each of the methods.

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