DEMAND FOR FERTILIZERYEAR (1,000S OF BAGS)1 42 63 44 55 106 87 78 99 1210 1411 15Data collected on the yearly demand for 50-pound bags of fertilizer at Wallace Garden Supply are shown in the following table: Develop a 3-year moving average to forecast demand.Forecast demand again with a weighted moving average in which sales in the most recent year are given a weight of 2 and sales in the other 2 years are each given a weight of 1.Develop a trend line for the demand for fertilizer using any computer software.For these three forecasts, 3-year moving average, a weighted moving average, and a trend line, which one would you use? Explain your answer.Use exponential smoothing with a smoothing constant of 0.3 to forecast the demand for fertilizer given. Assume that last period’s forecast for year 1 is 5,000 bags to begin the procedure. Would you prefer to use the exponential smoothing model or the weighted average model developed? Explain your answer.

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Answered: DEMAND FOR FERTILIZER YEAR (1,000S…

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter13: Regression And Forecasting Models

Section: Chapter Questions

Problem 42P: The file P13_42.xlsx contains monthly data on consumer revolving credit (in millions of dollars)...

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Data collected on the yearly demand for 50-pound bags of fertilizer at Wallace Garden Supply are shown in the following table:

Develop a 3-year moving average to forecast demand.
Forecast demand again with a weighted moving average in which sales in the most recent year are given a weight of 2 and sales in the other 2 years are each given a weight of 1.
Develop a trend line for the demand for fertilizer using any computer software.
For these three forecasts, 3-year moving average, a weighted moving average, and a trend line, which one would you use? Explain your answer.
Use exponential smoothing with a smoothing constant of 0.3 to forecast the demand for fertilizer given. Assume that last period’s forecast for year 1 is 5,000 bags to begin the procedure. Would you prefer to use the exponential smoothing model or the weighted average model developed? Explain your answer.

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