The manager of the I-85 Carpet outlet needs to be able toforecast accurately the demand for Soft Shag carpet (its biggest seller). If the manager does not order enough car-pet from the carpet mill, customers will buy their carpets from one of the outlets many competitors. The managerhas collected the following demand data for the past eightmonths. a. Compute a three-month moving average forecast formonths 4 through 9. b. Compute a weighted three-month moving average fore-cast for months 4 through 9. Assign weights of 0.55, 0.33, and 0.12 to the months in sequence, starting withthe most recent month.c. Compare the two forecasts using MAD. Which forecastappears to be more accurate? Month Demand for Soft Shag Carpet (1000 yd)1 52 103 64 85 146 107 98 12
The manager of the I-85 Carpet outlet needs to be able to
biggest seller). If the manager does not order enough car-
pet from the carpet mill, customers will buy their carpets
from one of the outlets many competitors. The manager
has collected the following demand data for the past eight
months.
a. Compute a three-month moving average forecast for
months 4 through 9.
b. Compute a weighted three-month moving average fore-
cast for months 4 through 9. Assign weights of 0.55,
0.33, and 0.12 to the months in sequence, starting with
the most recent month.
c. Compare the two forecasts using MAD. Which forecast
appears to be more accurate?
Month Demand for Soft Shag Carpet (1000 yd)
1 5
2 10
3 6
4 8
5 14
6 10
7 9
8 12
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