Suppose you, as manager of Boston BBQ, would like to help one of your stores forecast their demand for pork on a stick which exhibits a horizontal pattern. This store has previously used a naïve forcast. You have 2 years of quarterly data shown below. Extra columns are provided if you would like to use them for your work. **ROUND ALL FORECASTS TO THE NEAREST WHOLE NUMBER **

** **

**Year Quarter Sales**

** 1 1505**

**1 2 1469**

** 3 1516**

** 4 1435**

** **

** **

** **

**2 1 1579**

** 2 1499**

** 3 1536**

** 4 1463**

** **

A) Develop a forecast for year 2 ONLY using a moving average with k=3. Calculate the MAE, MSE, and MAPE for year 2 ONLY.

B) Develop a forecast for year 2 ONLY using a weighted moving average with k=3 and the following weights: wt = .5, wt-1 = .3, wt-k+1 = .2. Calculate the MAE, MSE, and MAPE for year 2 ONLY.

C) Develop a forecast for year 2 ONLY using exponential smoothing with α = .4. Calculate the MAE, MSE, and MAPE for year 2 ONLY.

D) Which of the 3 methods attempted in 5.1, 5.2, and 5.3 would you select and why?

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