question archive The business analyst for Ace Business Machines, Inc
The business analyst for Ace Business Machines, Inc
Subject:BusinessPrice:2.87 Bought7
The business analyst for Ace Business Machines, Inc. wants to forecast this year's demand for manual typewriters based on the following historical data:
Time Period Demand
5 years ago 900
4 years ago 700
3 years ago 600
2 years ago 500
Last year 300
A) What is the forecast for this year using a moving-average forecast based on the last three years?
B) What is the forecast for the next period using exponential smoothing method with a alpha factor of 0.4 a = 0.4
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Answer:
a) Demand t(St)=(0.3*Dt-1)+(0.2*Dt-2)+(0.1*Dt-3)/(0.3+0.2+0.1)
=(0.3*300)+(0.2*500)+(0.1*600)/0.6
=250/0.6
=416.67
b) The formula for expoonential smoothing is
St=alpha*Dt-1+(1-alpha)*St-1 where St is the estimated demand for the year t
Now we are given the estimated vlaue for 2 years ago is 520. So using the above formula the estimated
demand for one year ago is 510, Simlarly the estimated demand for this year is given by:
this year=(0.4*300)+(0.4*510)
=324
