Develop a four month moving average forecast for Wallace Garden Supply and compute the MAD

# Develop a four month moving average forecast for Wallace Garden Supply and compute the MAD

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5-13: Develop a four month moving average forecast for Wallace Garden Supply and compute the MAD. A three month moving average forecast was developed in the section on moving averages in Table 5.3

5-15: Data collected on the yearly demand for 50 lb. bags of fertilizer at Wallace Garden Supply are shown in the following table. Develop a three year moving average to forecast sales. Then estimate demand again with a weighted moving average in which sales in the most recent year are given a weight of 2 and sales in the other 2 years are each given a weight of 1. Which method do you think is best?

YEAR DEMAND FOR FERTILIZER

                                                                                                         (1,000s of bags)


1 4

2 6

3 4

4 5

5 10

6 8

7 7

8 9

9 12

10 14

11 15

5-16: Develop a trend line for the demand for fertilizer in Problem 5-15, using any computer software.

5-19: Sales of Cool-Man air conditioners have grown steadily during the past 5 years

YEAR SALES

1 450

2 495

3 518

4 563

5 584

6 ?

The sales manager had predicted, before the business started, that year 1s sales would be 410 air conditioners. Using exponential smoothing with a weight ? = 0.30, develop forecasts for years 2 through 6.

5-25: Sales of industrial vacuum cleaners at R. Lowenthal Supply Co. over the past 13 months are as follows:

SALES ($1,000) MONTH SALES ($1,000) MONTH

11 January 14 August

14 February 17 September

16 March 12 October

10 April 14 November

15 May 16 December

17 June 11 January

(a) Using a moving average with three periods, determine the demand for vacuum cleaners for next February.

(b) Using a weighted moving average with three periods, determine a demand for vacuum cleaners for February.

(c) Evaluate the accuracy of each of these methods.

(d) What other factors might R. Lowenthal consider in forecasting sales?

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Excerpt from file: Month Actual Shed Sales Four Month Moving Average January 10 February 12 March 13 April 16 May 19 June 23 15 July 26 August 30 21 Septemb 28 24.5 October 18 Novembe 16 25.5 Decembe 14 23 January 19 MAD Year Demand for Fertilizer (1,000s of bags) 1 2 3 4 5 6 7 8 9 10 11 4 6 4 5 10 8 7 9 12 14 15 I

Filename: Quantitative Analysis 5-13, 5-15, 5-16, 5-19, 5-25.xlsx

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