The data below is given for partial demand and forecast data for a product:
Quarter(t) 4 5 6
Forecast(Ft) 400 430 600
Demand(Dt) 420 370 680
The questions are as follows:
(a) Compute a 3-quarter simple moving average for quarter 7.
(b) The actual demand for quarter 7 turned out to be 1060. Compute an exponentially smoothed forecast for quarter 8 with α (alpha) = 0.15. Use the forecast for quarter 7 from part (a)
(c) Observing the actual demands for quarters 4 through 7, you are thinking about updating the value of α in part (b). Would you choose a smaller or larger value than 0.15? Justify your answer briefly.
(d) For the forecasts given in part A) (quarters 4 to 6) and the forecast computed in A) (quarter 7), compute a measure of bias error. Is there any bias, and if so, has the forecast been biased low or high?
(e) The product turns out to be popular homemade-style ice cream made in a small plant. The complete demand data for years 1, 2, and 3 are given below.
Quarterly demand(in gallons)
Year Quarter 1 Quarter 2 Quarter 3 Quarter 4
1 350 710 950 420
2 370 680 1060 500
3 450 750 1020 570
Compute the forecast for each of quarters in year 4, given that the forecast for the total demand in year 4 is 2980 gallons.