Quantitative Methods
The manager of the Carpet City outlet needs to make an accurate forecast of the demand for Soft
Shag carpet (its biggest seller). If the manager does
not order enough carpet from the carpet mill,
customer will buy their carpet from one of Carpet City’s many competitors. The manager has
collected the following demand data for the past 8 months:
Month
Demand for Soft Shag
Carpet (1,000 yd.)
1
10
2
9
3
8
4
9
5
10
6
12
7
14
8
11
a.
Compute a 3
–
month moving average forecast for months 4 through 9.
b.
Compute a weighted 3
–
month moving average forecast for months 4 through 9. Assign
weights of 0.55, 0.35, and 0.10 to the months in sequence, starting with
the most recent
month.
c.
Compare the two forecasts by using MAD. Which forecast appears to be more accurate
