**A+ Tutorial/Guide

INCLUDES EXCEL SPREADSHEET WITH FORMULAS

5-13: Develop a four month moving average forecast for Wallace Garden Supply and compute the MAD. A three month moving average forecast was developed in the section on moving averages in Table 5.3

5-15: Data collected on the yearly demand for 50 lb. bags of fertilizer at Wallace Garden Supply are shown in the following table. Develop a three year moving average to forecast sales. Then estimate demand again with a weighted moving average in which sales in the most recent year are given a weight of 2 and sales in the other 2 years are each given a weight of 1. Which method do you think is best?

YEAR DEMAND FOR FERTILIZER

                                                                                                         (1,000s of bags)

1 4

2 6

3 4

4 5

5 10

6 8

7 7

8 9

9 12

10 14

11 15

5-16: Develop a trend line for the demand for fertilizer in Problem 5-15, using any computer software.

5-19: Sales of Cool-Man air conditioners have grown steadily during the past 5 years

YEAR SALES

1 450

2 495

3 518

4 563

5 584

6 ?

The sales manager had predicted, before the business started, that year 1s sales would be 410 air conditioners. Using exponential smoothing with a weight ? = 0.30, develop forecasts for years 2 through 6.

5-25: Sales of industrial vacuum cleaners at R. Lowenthal Supply Co. over the past 13 months are as follows:

SALES ($1,000) MONTH SALES ($1,000) MONTH

11 January 14 August

14 February 17 September

16 March 12 October

10 April 14 November

15 May 16 December

17 June 11 January

(a) Using a moving average with three periods, determine the demand for vacuum cleaners for next February.

(b) Using a weighted moving average with three periods, determine a demand for vacuum cleaners for February.

(c) Evaluate the accuracy of each of these methods.

(d) What other factors might R. Lowenthal consider in forecasting sales?