Year Demand (1,000 Ib.) Forecast 1 16.8 14.1 16.8 15.3 15.7 12.7 15.5 11.9 14.4| 6 12.3 13.4 7 11.5 12.9 8 10.8 12.4 234 5G78
The Jersey Dairy Products Company produces cheese, which it sells to supermarkets and foodprocessing
companies. Because of concerns about cholesterol and fat in cheese, the company has
seen demand for its products decline during the past decade. It is now considering introducing some
alternative low-fat dairy products and wants to determine how much available plant capacity it will
have next year. The company has developed an exponential smoothing forecast with a = .40 to forecast
cheese demand. The actual demand and the forecasts from the model are as follows:Assess the accuracy of the forecast model by using MAD and cumulative error. If the exponential
smoothing forecast model does not appear to be accurate, determine whether a linear trend
model would provide a more accurate forecast.
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