Midterm Exam Practice 6-7 updated

.xlsx
0.2 2-week Moving Average Exponential Smoothing Week Actual De Forecast Error Squared Absolute Forecast Error Squared Absolute 1 38 38 2 34 3 40 36 4 35 37 5 37 37.5 6 36 36 7 31 36.5 8 40 33.5 9 33 35.5 10 41 36.5 37
Ans: a) Mov ave forecast = 37 Expo sm forecast = 36.9 b) Mov ave. MAD 3.1875 MAPE 0.0870 Expo. smoothing MAD 3.3156 MAPE 0.0929 Based on both measures, mov. average is better. c) 0.0819
Forecasting You are given the demand from the last 10 weeks. a) Calculate the 11th week forecast using 2-week moving average and exponential smoothing with alpha = 0.2. forecast for the 11th week with two methods. b) Calculate the MAD and MSE for both methods. Which method is better based on MAD? How about based on MSE? c) For exponential smoothing method, what is the best alpha based on MAD? Answers are in row 50.
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