Problem:
Here are the actual tabulated demands for an item for a nine-month period (January through September). Your supervisor wants to test two forecasting methods to see which method was better over this period.
Month Actual
January 110
February 130
March 150
April 170
May 160
June 180
July 140
August 130
September 140
a) Forecast April through September using a three-month moving average
b) Use simple exponential smoothing with an alpha of .3 to estimate April through September
c) Use MAD to decide which method produced the better forecast over the six-month period.