Questiоn 3. [25 pоints] Weekly demаnd fоr coffee аt а local roastery is as shown in Table 3. a. [10 points] Assume that the forecast made for the first week at the end of week 0 was 235. Estimate demand for week 2 through 13 using the simple exponential smoothing method with ɑ=0.2. Evaluate the MAD, MAPE, and MSE for week 1 through 12. b. [12 points] Suppose that the initial estimates for the intercept and the slope are 230 and 5 units, respectively. Use the double exponential smoothing method to provide the demand forecasts for week 1 through 13 using ɑ=0.2 and β=0.1. Evaluate the MAD, MAPE, and MSE for week 1 through 12. c. [3 points] Which method (simple exponential smoothing or double exponential smoothing) is better suited for the observed demands? And why? Table 3. Weekly demand for coffee at a local roastery. Week Demand (units) Week Demand (units) 1 231 7 256 2 235 8 259 3 238 9 264 4 245 10 268 5 252 11 289 6 253 12 291
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