solution

Refer to Problem 4.21. Complete the trendadjusted exponential-smoothing forecast computations for periods 7, 8, and 9. Confirm that your numbers for _tt , and _t match those in Table 4.2.

Problem 4.21

Refer to the trend-adjusted exponential smoothing illustration in Example 7. Using  = .2 and  = .4, we forecast sales for 9 months, showing the detailed calculations for months 2 and 3. In Solved Problem 4.2, we continued the process for month 4.

In this problem, show your calculations for months 5 and 6 for _{t t}and _t.

Problem 4.2

a) Plot the above data on a graph. Do you observe any trend, cycles, or random variations?

b) Starting in year 4 and going to year 12, forecast demand using a 3-year moving average. Plot your forecast on the same graph as the original data.

c) Starting in year 4 and going to year 12, forecast demand using a 3-year moving average with weights of .1, .3, and .6, using .6 for the most recent year. Plot this forecast on the same graph.

d) As you compare forecasts with the original data, which seems to give the better results?

Example 7

Table 4.2