A local restaurant has recorded the demand for bottled water in each of the last
ID: 387232 • Letter: A
Question
A local restaurant has recorded the demand for bottled water in each of the last 15 months of business. Use the recorded demand data below to develop three-period and four-period moving-average forecasts for bottles of water.
Round off all calculations to two decimal places. Maintaining two decimal places is required for all calculations.
Which forecast is the best (the three-period or four-period weighted method)?
a) The 3-period moving average is the best forecast because the MAD and MAPE are less than the 4-period moving average MAD and MAPE
b) The 3-period moving average is the best forecast because the MAD and MAPE are greater than the 4-period moving average MAD and MAPE.
c) The 4-period moving average is the best forecast because the MAD and MAPE are less than the 3-period moving average MAD and MAPE.
d) The 4-period moving average is the best forecast because the MAD and MAPE are greater than the 3-period moving average MAD and MAPE.
PeriodDemand Period Demand Period Demand 795 910 835 2 890 915 12 875 925 780 13 855 4 880 900 14 920 850 10 805 15 895Explanation / Answer
C) The 4-period moving average is the best forecast because the MAD and MAPE are less than the 3-period moving average MAD and MAPE.
The value will be based on the differences that we have with the actual and also on the weights that are provided.