Jane White has recorded the following sales figures for last year for her
business: January, $35,645; February, $35,456; March, $31,270; April,
$32,129; May, $34,456; June, $35,256; July, $36,218; August, $35,456;
September, $34,250; October, $32,156; November, $30,125; December,
$32,275. She wants to select from one of three models: a 3-month moving
average, a weighted moving average (she believes that the weights
should be 0.2, 0.3, and 0.5), and an exponential smoothing average in
which she uses an α of 0.2 and an assumed forecast for January of Year 1
of $35,000.
a. Construct a table that shows each of these forecasts for the current year and
provide the forecast for January of Year 2.
b. Using the available data and your forecasts, which model do you suggest that
Jane use for her business?