Time Period Demand 6 years ago 28 5 years ago 21 4 years ago 42 3 years ago 35 2 years ago 56 Last year 49 A. What is this year’s forecast using a three-year moving average? B. What is this year’s forecast using a three-year weighted moving average, where the weights are .5, .3, .2? C. What is this year’s forecast using the linear trend method. D. Which forecast method has the smallest Mean Absolute Deviation (MAD), based upon forecasts for the latest 3 years of data?

Time Period

Demand

6 years ago

28

5 years ago

21

4 years ago

42

3 years ago

35

2 years ago

56

Last year

49

A. What is this year’s forecast using a three-year moving average?

B. What is this year’s forecast using a three-year weighted moving average, where the weights are .5, .3, .2?

C. What is this year’s forecast using the linear trend method.

D. Which forecast method has the smallest Mean Absolute Deviation (MAD), based upon forecasts for the latest 3 years of data?

 

Solution

https://d2vlcm61l7u1fs.cloudfront.net/media%2Ff68%2Ff68d6d75-2461-4804-ab9b-4cb226878e7f%2FphpdhgRIM.png

The Mean Absolute Deviation (MAD) is lowest for

AllEscortAllEscort