Calculate a 3-month and weighted moving average as well as also compare the forecast using MAD.
The manager of the Carpet City outlet wants to make an accurate forecast of the demand for Soft Shag carpet (its biggest seller). If the manager does not order enough carpet from the carpet mill, customers will purchase their carpet from one of Carpet's City's many competitors. The manager has collected the subsequent demand data for the past 8 months:
|
Month
|
Demand for Soft Shag Carpet(1,000 yd.)
|
|
1
|
8
|
|
2
|
12
|
|
3
|
7
|
|
4
|
9
|
|
5
|
15
|
|
6
|
11
|
|
7
|
10
|
|
8
|
12
|
A. Calculate a 3-month moving average forecast for months 4 through 9(use excel)
B. Calculate a weighted 3-month moving average forecast for months 4 through 9. Assign weights of .55, .33, and .12 to the months is sequence, starting with the most recent month.
C. Equate the two forecasts by using MAD. Which forecast appears to be more accurate?