Question: An accurate forecast of the demand for gasoline is needed by the manager of Gas ‘N More station. If the manager does not order enough gasoline from the refiner, customers will by their gas from the station across the street. The manager has collected the following demand data for the past 8 months:

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

b) Compute a 5-month moving average forecast for months 6 - 9.

c) Compute a weighted 3-month moving average forecast for months 4 – 9. Assign weights of 0.5, 0.3 and 0.2 to the months in sequence, starting with the most recent month (so for Month 4 forecast, month 3 gets 0.5 weight, month 3 gets 0.3 weight and month 1 gets 0.2 weight).

d) Compare the three forecasts by using MAD. Which forecast appears to be most accurate?