Answer the following questions:

1. Use the following sales data to answer the questions.
Month Sales
January $250,000
February $200,000
March $300,000
April $350,000
May $450,000

a. Using a two month moving average, what are the expected sales for June?

b. Using a three month moving average, what are the expected sales for June?
2. Ed Rogers owns an appliance store. Sales data on a particular model of a DVD player for the past six months are shown below, along with the results of two different forecasting models:
Month Sales Forecast 1 Forecast 2
Jan 35 30 33
Feb 29 28 32
Mar 39 43 35
Apr 42 40 45
May 51 48 52
Jun 56 55 52
Which is the better forecasting model, based on the MAD criterion?

3. Ed Rogers owns an appliance store. Sales data on a particular model of a DVD player for the past six months are:
Month Sales
Jan 35
Feb 29
Mar 39
Apr 42
May 51
Jun 56
Forecast sales for July using an exponential smoothing model with a smoothing constant of 0.40. Assume that the forecast for May was 36.25.