Question: At the ABC Floral Shop, an argument developed between two of the owners, Bob and Henry, over the accuracy of the forecasting methods. Bob argued that first -order smoothing with \(\alpha \) =.1 would be the best method. Henry argued that the shop would get a better forecast with \(\alpha \) =.3

a. Using F1=100 and the date from problems 3 which of the two managers is right?

b. Graph the two forecasts and the original data using Excel. What does the graph reveal?

c. maybe the forecast accuracy could be improved even more. Try additional values of \(\alpha \) = .2,. 4 and .5 to see better accuracy is achieved.

Day Demand Day Demand
1 200 8 208
2 209 9 186
3 215 10 193
4 180 11 197
5 190 12 188
6 195 13 191
7 200 14 196