Dinico Gas Station: Management Decision Science Report

Management Decision Science

The manager of the Dinico Gas Station wants to forecast the demand for unleaded gasoline next month so that the proper number of gallons can be ordered from the distributor. The owner has accumulated the following data on demand for unleaded gasoline from sales during the past 12 months:
Month          Gasoline Demanded (gal.)
October                   800
November                725
December                630
January                   500
February                  645
March                      690
April                         730
May                         810
June                        1,200
July                         980
August                   1,000
September             850

a. Compute a 2-month moving average demand forecast for the months of December to September.
b. Compute a 2-month weighted moving average demand forecast for the months of December to September. (w1=0.6, w2=0.4)
c. Assume the demand forecast for November is equal to the actual demand of October, 800. Compute an exponentially smoothed demand forecast for the months of November to September, using an α value of .30.
d. Assume the demand forecast for October is also 800. Compute an adjusted exponentially smoothed demand forecast for the months of November to September. (with α = .30 and β=.20).
e. Compute linear trend line demand forecast for the months of October to September.
f. Compare the five forecasts by using MAD, MAPD and MSE and indicate which seems to be more accurate. (Since part a and b do not have forecasts for October and November, using information of December to September to calculate MAD, MAPD and MSE.)

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