| Forecasting |
| The manager of the Carptet City Outlet needs to make an accurate forecast of the demand for Soft Shag carpet (its biggest seller). |
| If the manager does not order enough carpet from the carpet mill, customers will buy their carpet from one of Carpet City's many |
| competitors. The manager has collected the following demand data for the past 8 months: |
| Month | | Demand for Soft Shag Carpet (1,000 yd.) |
| 1 | | 8 |
| 2 | | 12 |
| 3 | | 7 |
| 4 | | 9 |
| 5 | | 15 |
| 6 | | 11 |
| 7 | | 10 |
| 8 | | 12 |
| a. Compute a 3-month moving average forecast for months 4 through 9. |
| Month | | Demand for Soft Shag Carpet (1,000 yd.) |
| 1 | | 8 |
| 2 | | 12 |
| 3 | | 7 |
| 4 | | 9 |
| 5 | | 15 |
| 6 | | 11 | 11.6666666667 |
| 7 | | 10 |
| 8 | | 12 |
| | | | 11 |
| b. Compute a weighted 3-month moving average forecast for months 4 through 9. Assign weights of |
| .55, .33, and .12 to the months in sequence, starting with the most recent month. |
| c. compare the two forecasts by using MAD. Which forecast appears to be more accurate? |
Culbert
module_3_assignment_forecasting.xlsx
