Practice Question 1BackgroundKC Mechanic Shop was established by Mr. John, a seasoned mechanic who has over 20 years ofexperience in the automotive repair industry. Sales figures for the last ten months are as follows:-Months Actual Sales1 30,0002 39,0003 42,0004 50,0005 55,0006 61,0007 70,0008 77,0009 81,50010 90,000Spare PartsUse a three-period and a four-period weighted moving average to forecast salesfor the 12th month. (Use weights of 1,2,3 and 1,2,3 4).From the data provided in the case, use MAD to determine which forecastingtechnique is more accurate.If forecast for month 7 is $72,000, with an alpha of 0.4, use exponentialsmoothing to forecast sales for months 8 and 9.

Answered: Use a three-period and a four-period…

Practical Management Science

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ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

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Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...

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Practice Question 1

Background
KC Mechanic Shop was established by Mr. John, a seasoned mechanic who has over 20 years of
experience in the automotive repair industry.
Sales figures for the last ten months are as follows:-
Months Actual Sales
1 30,000
2 39,000
3 42,000
4 50,000
5 55,000
6 61,000
7 70,000
8 77,000
9 81,500
10 90,000
Spare Parts

Use a three-period and a four-period weighted moving average to forecast sales
for the 12th month. (Use weights of 1,2,3 and 1,2,3 4).
From the data provided in the case, use MAD to determine which forecasting
technique is more accurate.
If forecast for month 7 is $72,000, with an alpha of 0.4, use exponential
smoothing to forecast sales for months 8 and 9.

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