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The actual demand data for an item at a local retailer during the past six weeks...

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Question

Operations Management

The actual demand data for an item at a local retailer

during the past six weeks are shown below:

WEEK

ACTUAL DEMAND

(number of units)

Six weeks ago

202

Five weeks ago

201

Four weeks ago

199

Three weeks ago

200

Two weeks ago

203

One week ago

198

THIS WEEK

ACTUAL DEMAND NOT KNOWN

Determine the demand forecast for THIS WEEK using each of thefollowing methods:

a. A 3-week moving average.

[3]

b. A 4-week weighted moving average using weights of 15, 5, 3,and 2 for one week ago, two

weeks ago, three weeks ago, and four weeks ago, respectively.(

Hint

: the higher weights

are applied to the more recent time periods.)

c. Exponential smoothing using the following: smoothingconstant,

α

= 0.4 and the demand

forecast for three weeks ago = 199 units.

Answer & Explanation Solved by verified expert
4.1 Ratings (440 Votes)
a A 3periods moving averagemethod averages the actual value for the previous three periods togenerate the forecast for the next period This can be calculatedas the sum of the actual value for the previous three periods    See Answer
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