Sunrise Baking Company markets doughnuts through a chain of food stores and has been experiencing over- and underproduction because of forecasting errors. The following data are their daily demands in dozens of doughnuts for the past four weeks. The bakery is closed Saturday so Friday’s production must satisfy demand for both Saturday and Sunday.
Make a forecast for this week on the following basis:
a. Daily, using a simple four-week moving average.
b. Daily, using a weighted average of OAO for last week, 0.30 for two weeks ago, 0.20 for three weeks ago. and O.I0 for four weeks ago.
c. Sunrise is also planning its purchases of ingredients for bread production. If bread demand had been forecast for last week at 22,000 loaves and only 21.000 loaves were actually demanded, what would Sunrise’s forecast be for this week using exponential smoothing with a = 0.1 O?
d. Supposing, with the forecast made in (c). this week’s demand actually turns out to be 22,500.
What would the new forecast be for the next week?
a. Simple moving average, 4 weeks.
b. Weighted average with weights of AO, .30 .. 20, and .10.