3. [13 marks] A company is interested in forecasting demand fora product. They have reason to believe that the demand is notaffected by any seasonal changes and that it does not increase ordecrease systematically over time. They have data for the last 9periods (below).
Period | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 |
Demand | 230 | 210 | 220 | 250 | 300 | 280 | 240 | 230 | 200 |
In each part of this question, show your work: show the equationyou use, how you plug in, and your final answer. Please do notround any answers. Hint: see lecture 22 example3.
a) [3 marks] Use a 4-period moving average to forecast demandfor period 10.
b) [3 marks] Use a 3-period weighted moving average to forecastdemand for period 10 using weights of 0.6, 0.3, and 0.1,respectively. Show your work.
c) [3 marks] Suppose the forecast for period 9 was 235 units.Use exponential smoothing with a smoothing constant of 0.6 toforecast demand for period 10.
d) [4 marks] Suppose the actual demand in period 10 was 211units. Which of your forecasting methods from parts a through cperformed best, and why? Please provide a table similar to the oneshown on slide 48 of lecture 22, and make your conclusion based onyour table.
