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Sitwork No 2. Group 3 Forecasting
Sitwork No 2. Group 3 Forecasting
To minimize computations, transform the value of x (time) to simpler numbers. In this case,
designate year 2001 as year 1, 2002 as year 2, etc.
Problem 2. (5 marks)
A firm uses simple exponential smoothing with to forecast demand. The forecast for the week
of January 1 was 500 units whereas the actual demand turned out to be 450 units. Calculate the
demand forecast for the week of January 8.
Problem 3. (5 marks)
Given the yearly demand data, forecast the demand for years 1- 6 using smoothing constants of
α=0.6 and α=0.9 and their respective MAD . Assume F1=41.
Year Demand
1 45
2 50
3 52
4 56
5 58
6 ?
Problem 5. (5 marks)
Using the data in problem 3, Compute for the monthly forecast for year 4 through Year 6 using
a 3 year weighted moving average. Use weights of 0.7, 0.2 and 0.1. Solve for MAD.