The Tiger Hardware store is trying to forecast demand for 50 Watt LED bulbs. The bulbs cost $15 each, but they have an extended lifetime and they consume much less electricity over there lifetime than florescent bulbs. The last 12 months of demand data are provided in the Excel file HW#6.xlsx. Use Excel formulas to do the calculations and summarize your answers below. You need to turn in your excel spreadsheet on BB in order to receive credits!
(a) What is the forecast for period 13 using a 3-month simple moving average?
(b) What is the forecast for period 13 using a 3-month weighted moving average, where the weights are: last-month=0.6, 2-months-ago=0.3, and 3-months-ago=0.1.
(c) What is the forecast for period 13 using the exponential smoothing average, with alpha=0.6?
(d) What is the forecast for period 13 using the exponential smoothing average, with alpha=0.7?
(e) Calculate the MAD for each of the four forecasts above.
(f) Based on the data above, state which forecasting method you would use and why.
(g) Please attach a print out of your excel work and submit your excel spreadsheet on BB.