SCM 301 Lecture 5Outline of Last Lecture I. Naïve ForecastingII. Simple moving average formulaIII. Measures of forecast accuracyOutline of Current Lecture I. Weighted Moving Average FormulaCurrent LectureII. Weighted Moving Average Formulaa. T is last forecast. T-1 is second, t-2 is third, etc. Multiply demand times the corresponding weight. Forecast is the sum of the demands multiplied by the weight. b. Exponential Smoothing Modeli. Assume first forecast is the same as the first demand. ( week 1- demand: 654, First forecast number: 654)ii. F(t+1)= F(t) + a(At-Ft), a= .1, last forecast= 654.1. Ft= 654+ .1(654-654)= 654 as first forecast. c. Mean Squared Error (MSE)i. Variance, large forecast errors and heavily penalizedThese notes represent a detailed interpretation of the professor’s lecture. GradeBuddy is best used as a supplement to your own notes, not as a
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