A Coffee Chain Sells Temperature-Controlled Smart Mugs at $150 Each

question 131

Essay

A coffee chain sells temperature-controlled smart mugs at $150 each. The monthly sales of mugs for the last twelve months were:
(a) Compute a 3-month moving average demand forecast for each month from June through December. (Round all forecasts to the nearest whole unit.)
(b) Compute a 5-month moving average demand forecast for each month from June through December. (Round all forecasts to the nearest whole unit.)
(c) Calculate the MSE covering June through December for both methods.
(d) Which method is more likely to have a better forecast performance?

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Definitions:

Familiar

Well known from long or close association, giving a sense of comfort or recognition.

Systematic Desensitization

A therapeutic technique used to treat phobias and anxiety disorders by gradually exposing the patient to the feared object or situation in a controlled manner.

Relax

To become less tense or anxious, or to make something less taut or firm, often in the context of stress relief or leisure activities.

Imagine

The ability to form new images and sensations in the mind that are not perceived through the five senses.