question archive 1)Moving Averages
1)Moving Averages
Subject:BusinessPrice:2.84 Bought6
1)Moving Averages. Use the below actual sales to calculate a three-year average which will be used as the forecast for next periods (chapter 14, text).
2)Exponential Smoothing. Use the same data to forecast sales for the next periods with α=.40 (chapter 15, text).
3)Regression Analysis on Excel. Draw a scatter graph from Insert/Graph/Scatter graph selections in Excel (chapter 16, text).
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ANSWER
Step-by-step explanation
1. 3 year moving average forecast:
| Month | Actual Sales | 3 months moving total | 3 months moving average | 3 months moving forecast |
| 1 | 3,050.00 | |||
| 2 | 2,980.00 | |||
| 3 | 3,670.00 | 9,700.00 | 3,233.33 | |
| 4 | 2,910.00 | 9,560.00 | 3,186.67 | 3,233.33 |
| 5 | 3,340.00 | 9,920.00 | 3,306.67 | 3,186.67 |
| 6 | 4,060.00 | 10,310.00 | 3,436.67 | 3,306.67 |
| 7 | 4,750.00 | 12,150.00 | 4,050.00 | 3,436.67 |
| 8 | 5,510.00 | 14,320.00 | 4,773.33 | 4,050.00 |
| 9 | 5,280.00 | 15,540.00 | 5,180.00 | 4,773.33 |
| 10 | 5,504.00 | 16,294.00 | 5,431.33 | 5,180.00 |
| 11 | 5,810.00 | 16,594.00 | 5,531.33 | 5,431.33 |
| 12 | 6,100.00 | 17,414.00 | 5,804.67 | 5,531.33 |
| 13 | 5,804.67 |
Thus forecast for the 13th month will be = 5,804.67
2. Exponential smoothing:
Here new forecast = last period's forecast + alpha*(last period's actual figure - last period's forecast)
Forecast for January will be assumed as 3,050. Thus:
| Month | Actual Sales | Forecast |
| 1 | 3,050.00 | 3,050.00 |
| 2 | 2,980.00 | 3,050.00 |
| 3 | 3,670.00 | 3,022.00 |
| 4 | 2,910.00 | 3,281.20 |
| 5 | 3,340.00 | 3,132.72 |
| 6 | 4,060.00 | 3,215.63 |
| 7 | 4,750.00 | 3,553.38 |
| 8 | 5,510.00 | 4,032.03 |
| 9 | 5,280.00 | 4,623.22 |
| 10 | 5,504.00 | 4,885.93 |
| 11 | 5,810.00 | 5,133.16 |
| 12 | 6,100.00 | 5,403.89 |
| 13 | 5,682.34 |
Thus forecast for 13th month = 5,682.34
