Answered: BOB'S ERROR SHERRY'S ERROR SALES BOB…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

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

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Question

Storrs Cycles has just started selling the new Cyclone mountain bike, with monthly sales as shown in the table. First, coowner Bob Day wants to forecast by exponential smoothing by initially setting February's forecast equal to January's sales with a = . I. Co-owner Sherry Snyder wants to use a three-period moving average                                                                                     a) Is there a strong linear trend in sales over time?
b) Fill in the table with what Bob and Sherry each forecast for May and the earlier months, as relevant.                                                                                                                                                                        c) Assume that May's actual sales figure turns out to be 405. Complete the table's columns and then calculate the mean absolute deviation for both Bob's and Sherry's methods.
d) Based on these calculations, which method seems more accurate?