Please keep answer simple and show steps 1. The business analyst for Video Sales

Question

Please keep answer simple and show steps

1. The business analyst for Video Sales, Inc. wants to forecast this year's demand for DVD movies based on the following historical data: Period a). What is the forecast for this year using a three-period 5 years ago 900 b) weighted moving average with weights of 0.2, and 0.1? What is the forecast for this year using exponential 4 years ago 700 3 years ago 600 smoothing with alpha 0.5, given the forecast for 2 years 2 years ago 500 ago was 520? What is the MAD of the forecasts? 1 year ago c) Based on the data over the 5 years, what is the forecast for 400 this year using the linear trend equation? Be sure to show ALL critical works on the exam paper to receive credits. S Actual -Forecast MAD or y

Explanation / Answer

a) Forecast for this year = 0.3 x 400 + 0.2 x 500 + 0.1 x 600

Forecast for this year = 280

b) Exponential smoothing forecast 1 year ago = 520 + 0.5 x ( 500 - 520)

Exponential smoothing forecast 1 year ago = 510

Exponential smoothing forecast this year = 510 + 0.5 x ( 400 - 510)

Exponential smoothing forecast this year = 455

MAD = 130 / 2

MAD = 65

c) The linear trend equation = b0 + b1 x

b = (5 x 8100 - 15 x 3100) / 5 x 55 - (15)2

b = - 6000 / 50

b = -120

a = 3100 - (-120) x 15 / 5

a = 980

y = a + bt

y = 980 - 120 t

forecast for this year

y6 = 980 - 120 x 6

y6 = 260

Period Demand forecast demand error Absolute deviation 1 900 2 700 3 600 4 500 520 -20 20 5 400 510 -110 110 Total = 130

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