Tammy Dough, manager of Dough’s Pizza, must forecast weekly demand for these special pizzas, Polish Prize Pizza, so that she can order the correct amount of pizza shells weekly. Recently, the demands are as follows:
Week Number of Pizzas sold.
1 500
2 650
3 520
Week Number of Pizzas sold.
4 600
5 700
6 600
Forecast the demand for Polish Prize Pizza for Weeks 4, 5 and 6, using the 3 period moving average method.
Forecast the demand for Weeks 4, 5 and 6, using weights of 0.5, 0.3, 0.2 for the most recent, next recent, and most distant data, respectively.
Assume that the forecast for Week 1 is 550. Forecast the demand for Week 2 through Week 6 using the exponential smoothing method with a = 0.3.
Now, forecast the demand for Weeks 2 through 6 using the exponential smoothing method with a = 0.8. How does it compare to that in part (c)?