A company is considering what forecasting method to use for coming time periods. The company has used something of a qualitative (consensus-based) forecasting method in the past, and is wanting to know if a more formal, quantitative forecasting method would be appropriate for them. Consider the following data from recent time periods:
|Time period||Forecast||Actual Demand|
|Three quarters ago||225||230|
|Two quarters ago||240||270|
|This quarter||You will determine.||?|
Briefly address each of the following bullets:
- Discuss what method of forecasting you view to be most appropriate given the data given above. Explain why you believe your chosen forecasting method to be the most appropriate.
- Select an appropriate value for alpha, and calculate an exponential smoothing forecast for this quarter. Discuss the relationship between the alpha value that you selected and the forecast value that you calculated. In other words, if you had selected a lower value for alpha, how would the calculated value be different, and if you had selected a higher value for alpha, how would the calculated value be different?
- Assume that, at the end of this quarter, we could report that the demand for this quarter was actually 275 (just like last quarter). Would this information cause you to rethink the alpha value that you selected? If so, how would it impact the value that you would have selected for alpha?
The final paragraph (three or four sentences) of your initial post should summarize the one or two key points that you are making in your initial response.
After multiple people have posted the alpha value that they selected and the forecast that they calculated, compare your calculated value with those of your classmates. Whose value was most accurate? Why do you think the person with the most accurate forecast had the most accurate forecast?
Your initial posting should be about 1 page (400 to 500 words) in length.
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