Among other services and products that Karl's Copiers provides, it sells and repairs photocopy machines. It is now the end of December, 2015 and the manager needs to plan his service staffing for January, 2016.
The manager first needs to forecast the number of service calls for January, 2016. Following are the record of service calls for the past 12 months. Month Number of Service Calls Month Number of Service Calls January 30 July 31 February 24 August 38 March 27 September 37 April 31 October 36 May 37 November 32 June 34 December 29 You have been asked by the manager to help with the forecast for January, 2016.
He has asked you to provide forecasts for January using the following three methods:
- Moving Average
- Weighted Moving Average
- Exponential Smoothing
He has also asked you to determine which of these three forecasts he should select. To make this assessment, he has asked that you compare the actual number of service calls to what the forecasts would have been for August through December, 2015 using each of the three methods.
i) For the moving average, use a four month moving average.
ii) For the weighted moving average, use a two-period weighted average with a weight of 0.70 for the most recent month and the remaining weight(s) consistent with this forecasting method as we applied it.
iii) For exponential smoothing, use an ? = 0.30, and using a starting forecast for June, 2015 of 35.
a) Prepare a forecast for January, 2016 using each of the three methods.
b) Recommend which of these three methods the manager should use for January, 2016 based on the results of evaluation of the forecasts for August through December, 2015.
Your selection criteria must be based on one of the numerical evaluation methods we have learned and used this semester. Only saying "it is the easier method" is not acceptable.