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CH 4 P 5

The document contains historical demand data over 11 years and uses two different moving average approaches to forecast future demand: 1) A 3-year simple moving average, which forecasts demand from years 4 through 12. The mean absolute deviation for this forecast is 2.63. 2) A 3-year weighted moving average that assigns weights of 0.15, 0.25, and 0.60 to the past 3 years of data. This approach forecasts demand from years 4 through 12 and has a mean absolute deviation of 2.54. The weighted moving average produces the better forecast based on its lower mean absolute deviation value.

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Ghada k
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109 views

CH 4 P 5

The document contains historical demand data over 11 years and uses two different moving average approaches to forecast future demand: 1) A 3-year simple moving average, which forecasts demand from years 4 through 12. The mean absolute deviation for this forecast is 2.63. 2) A 3-year weighted moving average that assigns weights of 0.15, 0.25, and 0.60 to the past 3 years of data. This approach forecasts demand from years 4 through 12 and has a mean absolute deviation of 2.54. The weighted moving average produces the better forecast based on its lower mean absolute deviation value.

Uploaded by

Ghada k
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
You are on page 1/ 2

he following table shows the actual demand observed over the last 11 

years:
                                             
                                             
                                             
    
Year 1 2 3 4 5 6 7 8 9 10 11
Demand 6 8 4 7 13 9 13 13 9 9 8
This exercise contains only parts b, c, and d.
b) Using the 3-year moving average, provide the forecast from periods 4 through 12 (round your
responses to one decimal  place).
Year 4 5 6 7 8 9 10 11 12
Forecast 6 6 6.3 6.3 8 8 9.6 9.6 11.6 11.6 11.6 11.6 11.6 11.6 10.3 10.3 8.6 8.6

sum (Weight for period n*demandinperiod n)/sum(weights)

c) Using the 3-year weighted moving average with weights


0.15,
0.25,
and
0.60,
using
0.60
for the most recent period, provide the forecast from periods 4 through 12  (round your responses to
two decimal  places).
Year 4 5 6 7 8 9 10 11 12
Forecast nothing nothing nothing nothing nothing nothing nothing nothing nothing

wma 4 = (0.15*4)+(0.25*8)+(0.6*4)/1

Deman
year d wma
1 6  
2 8  
3 4  
4 7 5.3
5 13 6.4
6 9 10.15
7 13 9.7
8 13 12
9 9 12.4
10 9 10.6
11 8 9.6
8.4

c) Using the 3-year weighted moving average with weights


0.15,
0.25,
and
0.60,
using
0.60
for the most recent period, provide the forecast from periods 4 through 12  (round your responses to
two decimal  places).
Year 4 5 6 7 8 9 10 11 12
Forecast 5.3 5.3 6.4 6.4 10.15 10.15 9.7 9.7 12 12 12.4 12.4 10.6 10.6 9.6 9.6 8.4 8.4
d) Mean absolute deviation for the forecast developed using the 3-year moving average is
2.63
and for the 3-year weighted moving average is
2.54.
Based on this information, the better forecast is achieved using the
weighted moving average

approach.

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