The manager of Carpet City outlet needs to make an accurate forecast of demand for Soft Shag carpet (its biggest seller). If the manager doesn't order enough carpet from the carpet mill, customers will purchase their carpet from one of Carpet City's many competitors. The manager has collected the following demand data for 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. Evaluate a weighted 3-month moving average forecast for months 4 through 9. Assign weights of .55, .33, and .12 to the months in sequence, starting with most recent month.
b. Compare the two forecasts by using MAD. Which forecast appears to be more accurate?