Question

The historical demand for a product is as follows: Month Demand January 12 February 11 March 15 April 12 May 16 June 15 Stating any assumptions that you make answer the following questions. (i) Using a weighted moving average with weights of 0.60 for June; 0.30 for May and 0.10 for April, find the July forecast. (4 marks) (ii) Using a simple three-month moving average, find the July forecast. (4 marks) (iii) Using simple exponential smoothing with α=0,2 and a June forecast of 13 find the July forecast. Comment about your solution.

Answer 1

solution:- Given that, Month Demand = | January February = march = 7 frow 4 5 Tune i) using a moving weighted average : The weight of June = 0.60 The weight of May = 0.30 The weight of April = 0.10 find the July face Cast :- Goly fure Cart (0.60X15 ) + (0.30x16) + (0.10X18) - 9+4.8 +12 = 15 unid å using simple three month moving average , And the July fore Cast : .

July forecast - 2.46+15 - 43/3 x=0.2 and a - 14.33 inside hi) using simple Exponential smoothing with June forecast of 13 :- find the July fore Cast :- Fjoly - ap sone + (-a) E. = 0,2*15 + (1-0.2)x 13 = 3+ 0.8)x13 = 3+10.4 = 13.4 unit June Fooly = 13.4 units