Question

Brothers Willie and Billie each own a gas station for the same national chain. As brothers, they are very competitive. They held a contest to see who could do a better job forecasting sales for their station over the course of a year. Willie used a four-week moving average; Billie used a two-week moving average.

Willie's Petrol Park
Week	Sales (1000s of gallons)
1	17
2	21
3	19
4	23
5	18
6	16
7	20
8	18
9	22
10	20
11	15
12	22

Billie's Gasoline Grotto
Week	Sales (1000s of gallons)
1	85
2	84
3	76
4	69
5	54
6	80
7	100
8	54
9	88
10	80
11	60
12	66

a. Create the forecasts for each gas station.

b. Which error calculation would be the best to use in this contest? Why?

c. Who won the contest?

Answer 1

Answer:

a. Forecasts for each gas station

1	Wille's Petrol Park
	Week	Sales	Four week moving average
	1	17000
	2	21000
	3	19000
	4	23000
	5	18000	20000
	6	16000	20250
	7	20000	19000
	8	18000	19250
	9	22000	18000
	10	20000	19000
	11	15000	20000
	12	22000	18750
2	Bille's Gasoline Grotto
	Week	Sales	Two week moving average
	1	85000
	2	84000
	3	76000	84500
	4	69000	80000
	5	54000	72500
	6	80000	61500
	7	100000	67000
	8	54000	90000
	9	88000	77000
	10	80000	71000
	11	60000	84000
	12	66000	70000

b.Error calculation -Avg of standard error

1	Wille's Petrol Park
	Week	Sales	Four week moving average	Standard error
	1	17000		0
	2	21000		0
	3	19000		0
	4	23000		0
	5	18000	20000	2000
	6	16000	20250	4250
	7	20000	19000	1000
	8	18000	19250	1250
	9	22000	18000	4000
	10	20000	19000	1000
	11	15000	20000	5000
	12	22000	18750	3250
				1813	Avg error
2	Bille's Gasoline Grotto
	Week	Sales	Two week moving average	Standard error
	1	85000		0
	2	84000		0
	3	76000	84500	8500
	4	69000	80000	11000
	5	54000	72500	18500
	6	80000	61500	18500
	7	100000	67000	33000
	8	54000	90000	36000
	9	88000	77000	11000
	10	80000	71000	9000
	11	60000	84000	24000
	12	66000	70000	4000
				14,458	Avg error

c. Based on above calculation, we can conclude that Wille won the contest

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