solution

Use exponential smoothing with a smoothing constant of 0.3 to forecast the registrations at the seminar given in Problem 4.10. To begin the procedure, assume that the forecast for year 1 was 5,000 people signing up.

a) What is the MAD?

b) What is the MSE?

Problem 4.10

Data collected on the yearly registrations for a Six Sigma seminar at the Quality College are shown in the following table:

a) Develop a 3-year moving average to forecast registrations from year 4 to year 12.

b) Estimate demand again for years 4 to 12 with a 3-year weighted moving average in which registrations in the most recent year are given a weight of 2, and registrations in the other 2 years are each given a weight of 1.

c) Graph the original data and the two forecasts. Which of the two forecasting methods seems better?