Question: Repeat the calculations in Problem using simple exponential smoothing, and allow the smoothing constant to be a variable. That is, the smoothing constant should be a cell location. By experimenting with different values of α, determine the value that appears to minimize the
a. MAD
b. MSE
c. MAPE Assume that the forecast for month 1 is 225.
Problem: Over a two-year period, the Topper Company sold the following numbers of lawn mowers:
a. In column A input the numbers 1 to 24 representing the months and in column B the observed monthly sales. Compute the three-month moving-average forecast and place this in the third column. Be sure to align your forecast with the period for which you are forecasting (the average of sales for months 1, 2, and 3 should be placed in row 4; the average of sales for months 2, 3, and 4 in row 5; and so on.) In the fourth column, compute the forecast error for each month in which you have obtained a forecast.
b. In columns 5, 6, and 7 compute the absolute error, the squared error, and the absolute percentage error. Using these results, find the MAD, MSE, and MAPE for the MA(3) forecasts for months 4 through 24.
c. Repeat parts (a) and (b) for six-month moving averages. (These calculations should appear in columns 8 through 12.) Which method, MA(3) or MA(6), was more accurate for these data?