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.)
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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