1. Prepare a forecast for period 6 using each of these approaches:

a. The appropriate naive approach

b. A three-period moving average

c. A weighted average using weights of .5 (most recent), .3, and .2

d. Exponential smoothing with a smoothing constant of .4

Period |
Number of Complaints |

1 |
50 |

2 |
62 |

3 |
58 |

4 |
53 |

5 |
64 |

2. Two different forecasting techniques (F1 and F2) were used to forecast demand for cases of bottled water. Actual demand and the two sets of forecasts are as follows:

Period |
Demand |
F1 |
F2 |

1 |
68 |
66 |
69 |

2 |
72 |
74 |
70 |

3 |
75 |
74 |
72 |

4 |
73 |
71 |
75 |

Compute MAD for each set of forecasts. Given your results, which forecast to be the more accurate? Explain.

Compute MSE for each set of forecasts given your results, which forecast appears to be the most accurate? Explain.

3. Suppose a software producer is about to release a new version of its popular software.

What information do you think it would take into account in forecasting initial sales?