Homework SourseForecasts and actual sales of MP3 players at Just Say Music
Forecasts and actual sales of MP3 players at Just Say Music are as follows:
Month
Forecast
Actual Sales
March
150
170
April
220
229
May
205
192
June
256
241
July
250
238
August
260
210
September
270
225
October
280
179
a. What is the forecast for November, using a two-period moving average?
b. What is the forecast for November, using a three-period moving average?
c. Compute MSE for the two- and three-period moving average models and compare results.
| Month | Forecast | Actual Sales |
| March | 150 | 170 |
| April | 220 | 229 |
| May | 205 | 192 |
| June | 256 | 241 |
| July | 250 | 238 |
| August | 260 | 210 |
| September | 270 | 225 |
| October | 280 | 179 |
Solution
a. demand for the month of November based on 2 moving average
= 225+179/2= 404/2= 202
b. based on 3 period moving average the demand will be
= 210+225+179/3= 614/3= 205
c. when we follows 2 period moving averages the expected demand is for 202 units in November and when it is 3 moving averages the expected demand is 205 units.
