Problem 3

The Hughes Supply Company uses an inventory management method to determine the monthly demands for various products. The demand values for the last 12 months of each product have been recorded and are available for future forecasting. The demand values for the 12 months of 2019 for one electrical fixture are presented in Table below.

a. Use exponential smoothing with a smoothing constant of 0.5 and an initial value 205 to forecast the demand for January 2019.

b. Evaluate this forecasting methods using the MAPE.

c. Find the best value for smoothing constant for the exponential smoothing and the MAPE associated with it.

d. Given the part c what is your forecast for January 2020.