HW5 - Brittany Braud Management 368 Homework 5 1 Chapter 8...

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Brittany Braud Management 368 Homework 5 June 13, 2011 1. Chapter 8, Problem #4: The following data are monthly sales of jeans at a local department store. The buyer would like to forecast sales of jeans for the next month, July. Month Sales January 45 February 30 March 40 April 50 May 55 June 47 a) Forecast sales of jeans for March through June using the Naïve method, a two-period moving average, and exponential smoothing with an σ = 0.2 Answer: Month Sales Naïve Absolute Error January 45 February 30 March 40 30 10 April 50 40 10 May 55 50 5 June 47 55 -8 MAD = Σ | actual – forecast | = 8.25 n Month Sales 2-period moving average Absolute Error January 45 February 30 March 40 (45+30)/2 = 37.5 2.5 April 50 (30+40)/2 = 35 15 May 55 (40+50)/2 = 45 0 June 47 (50+55)/2 = 52.5 5.5 MAD = Σ | actual – forecast | = 8.25 n Month Sales Exponential Smoothing σ = 0.2 Absolute Error January 45 February 30 March 40 (0.2)(30)+(0.8)(30) = 30 10 April 50 (0.2)(40)+(0.8)(30) = 32 18

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May 55 (0.2)(50)+(0.8)(32) =
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HW5 - Brittany Braud Management 368 Homework 5 1 Chapter 8...

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