Weekly sales of copy paper at Cubicle Suppliers are provided in the table below. Compute a three-period moving average and a four-period moving average for weeks 5, 6, and 7. Compute the MAD for both forecasting methods
Which model is more accurate? Forecast week 8 with the more accurate method.
Week Sales (cases)
1 17
2 21
3 27
4 31
5 19
6 17
7 21
Week Sales (cases) 3MA |error| 4MA |error|
1 17
2 21
3 27
4 31
5 19 26.3 7.3 24.0 5.0
6 17 25.7 8.7 24.5 7.5
7 21 22.3 1.3 23.5 2.5
8 22.0
The MAD for the 3-week moving average is (7.3 + 8.7 + 1.3 ) / 3 = 5.77. The MAD for the 4-week moving average is (5.0 + 7.5 + 2.5 ) / 3 = 5.00. The four-week moving average is more accurate. The forecast with the 4-moving average is 22.0.
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