Answer: A. forecast is 358, B. forecast is 325, C.forecast is 420
Explanation:
A. Simple three Moving Average
N1 = 400
N2 = 350
N3 = 325
total Periods N =3
Simple Moving Average = (N1 + N2 + N3)/ N
Simple Moving Average = (400 + 350 +325)/ 3
Simple Moving Average = 1075/3 = 358.333 = 358 (rounded off)
using a simple moving average we can forecast the demand to be 358
B Simple three Moving Average
N1 = 350
N2 = 325
N3 = 300
total Periods N = 3
Simple Moving Average = (N1 + N2 + N3)/N
Simple Moving Average = (350 +325 +300)/3
Simple Moving Average = 975/3 = 325
using a simple moving average we can forecast the demand to be 325 this month
C. Exponential Smoothing
when using Exponential smoothing method to forecast demand, to calculate the demand forecast Exponential smoothing method
we take the most recent period's demand and multiply it by the smoothing factor and add most recent period's forecast multiplied by (1 - smoothing fact).
let D = most recent periods demand actual demand = 300
S = Smoothing factor = 0.20
F = most recent period's forecast = 450
Demand Forecast = (D × S) + (F × (1-S)
Demand Forecast = (300 × 0.2) + (450 × (1 - 0.20)
Demand Forecast = (300 × 0.2) + (450 × 0.80)
Demand Forecast = 60 + 360 = 420
using exponential smoothing the demand forecast is 420
