Storrs Cycles has just started selling the new Cyclonemountain bike, with monthly sales as shown in the table. First,co-owner Bob Day wants to forecast by exponential smoothingby initially setting February’s forecast equal to January’s saleswith a = .1. Co-owner Sherry Snyder wants to use a three-periodmoving average. a) Is there a strong linear trend in sales over time?b) Fill in the table with what Bob and Sherry each forecast forMay and the earlier months, as relevant.c) Assume that May’s actual sales figure turns out to be 405.Complete the table’s columns and then calculate the meanabsolute deviation for both Bob’s and Sherry’s methods.d) Based on these calculations, which method seems moreaccurate?
Storrs Cycles has just started selling the new Cyclone
mountain bike, with monthly sales as shown in the table. First,
co-owner Bob Day wants to forecast by exponential smoothing
by initially setting February’s forecast equal to January’s sales
with a = .1. Co-owner Sherry Snyder wants to use a three-period
moving average.
a) Is there a strong linear trend in sales over time?
b) Fill in the table with what Bob and Sherry each forecast for
May and the earlier months, as relevant.
c) Assume that May’s actual sales figure turns out to be 405.
Complete the table’s columns and then calculate the mean
absolute deviation for both Bob’s and Sherry’s methods.
d) Based on these calculations, which method seems more
accurate?
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