Forecasting Exercise
The actual sales for stoves for the first six month in 20XX were:
Jan 45, Feb 50, Mar 55, Apr 48, May 50 and June 45 respectively.
Determine in whole numbers:
i.
The average actual sales for those six months
ii. Trends: increase this average by 8% per month for the next
three months
iii. SMA: make a forecast for July by using a three months
simple moving average.
iv.
v.
WMA: make a forecast for July by using a three months
weighted moving average where the weights are 0.5; 0.3 and
0.2 respectively.
Make a forecast for July by using the exponential smoothing
method, if the forecast for June was 50 and the smoothing
constant is 0,4.
Forecasting Solutions
i.
Average = 293/6 = 49 stoves
ii. Trends: July = 49 + 8% = 53 stoves
Aug = 53 + 8% = 57
Sept = 57 + 8% = 62
iii) SMA = 143/3 = 48 stoves
iv) WMA = 48 x 0,2 = 9,6
50 x 0,3 = 15,0
45 x 0,5 = 22,5
47,1 say 47 stoves
v) Ft = Ft-1 + α (At-1 – Ft-1)
= 50 + 0,4(45 – 50)
= 50 + (0,4 x -5)
= 50 – 2
= 48 stoves