Answer :
Q.1: Three-quarter moving average forecast - Avg. demand of previous 3 qtrs., forecast error.
Q.2: Five-quarter moving average forecast - Avg. demand of previous 5 qtrs., forecast error.
Q.3: Weighted three-quarter moving average forecast - Avg. weighted demand of previous 3 qtrs., forecast error.
Q.4: Compare forecasts - Cumulative error, MAD for accuracy comparison.
Q.1 - To compute a three-quarter moving average forecast for quarters 4 through 13, we take the average of the demand for fertilizers over the previous three quarters. For example, to calculate the forecast for quarter 4, we would average the demand for quarters 1, 2, and 3. We repeat this process for each quarter from 4 to 13, using the most recent three quarters of data each time. The forecast error for each quarter is calculated by subtracting the actual demand from the forecasted demand.
Q.2 - To compute a five-quarter moving average forecast for quarters 6 through 13, we take the average of the demand for fertilizers over the previous five quarters. For example, to calculate the forecast for quarter 6, we would average the demand for quarters 1, 2, 3, 4, and 5. We repeat this process for each quarter from 6 to 13, using the most recent five quarters of data each time. The forecast error for each quarter is calculated by subtracting the actual demand from the forecasted demand.
Q.3 - To compute a weighted three-quarter moving average forecast, we assign weights of 0.5, 0.33, and 0.13 to the most recent, next most recent, and the most distant data respectively. We multiply each demand value by its corresponding weight and sum the weighted values. For example, if the most recent demand value is 100, the next most recent is 80, and the most distant is 60, the weighted three-quarter moving average forecast would be (0.5 * 100) + (0.33 * 80) + (0.13 * 60). We repeat this process for each quarter from 4 to 13, using the most recent three quarters of data each time. The forecast error for each quarter is calculated by subtracting the actual demand from the forecasted demand.
Q.4 - To compare the forecasts developed in Q.1, Q.2, and Q.3 using cumulative error and MAD (mean absolute deviation), we calculate the cumulative error by summing the forecast errors for each quarter. We then calculate the MAD by taking the average of the absolute values of the forecast errors for each quarter. We can compare the cumulative error and MAD values for each forecast method to determine which method provides the most accurate forecast. A lower cumulative error and MAD value indicate a more accurate forecast.
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