Rift Valley University

Gullelie Campus
Masters of Business Administration
Managerial Economics
Group Assignment
Eden Gizaw
0071/22

June, 2023
Addis Ababa, Ethiopia

1
1. Use any one business organization and show the demand forecasting using the
quantitative forecasting methods (Using Moving average of 3-months, weighted
moving average of 3-months method, Exponential smoothing with Smoothing
constant of 0.5).

MEIRAF ELECTRONICS from MEGENAGNA has been chosen for this analysis. The table
below is for the Mobile phone products demand for the last five months. The forecast for the
5th month was 120.

Month 1 2 3 4 5
Actual demand 105 110 110 114 128

Since we are allowed to use 3-months. We use simple 3 month moving average to forecast
demand for month 6.
110+114+128
1) MA6 = = 117.33 ≈ 117
3
Therefore, the forecast demand for 6th month is 117.
2) F3 = WMA = W1At-1 + W2.At-2 + … +Wn*At-n
5 4 3
= (128) + (114) + (110)
15 15 15

= 0.34 * (128) + 0.267 * (114) + 0.2 * (110)

= 43.52 + 30.43 + 22 = 95.95 ≈ 96

Therefore, the forecast for 6th month is 96 using weighted average method

3) Ft = Ft-1 + (At-1 - Ft-1)

F6 = F5 + (A5 – F5)
= 120 + 0.5 (128 – 120)
F6 = 124

Therefore, the forecast for 6th month is 124 using exponential smoothing method.