Question: The manager of the carpet city outlet needs to make an accurate forecast of the demand for soft shag carpet (its biggest seller). If the manager does not order enough from the carpet mill, customers will buy their carpet from one of carpet city’s many competitors. The manager has collected the following demand data for the past 8 months.

a. Compute a 3-month moving average forecast for month 4 through 9.

b. Compute a weighted 3-month moving average forecast for month 4 through 9. Assign weights of .55, .33, and .12 to the months in sequence, starting with the most recent month.

c. Compare the two forecasts by using MAD. Which forecast to be more accurate?