2. The manager of the Carpet City outlet needs to make an accurate forecast of the demand for Soft Shag carpet (its biggest seller). If the manager does not order enough carpet from the carpet mill, customers will buy their carpet from one of Carpet City's many competitors. The manager has collected the following demand data for the past 8 months: Month Demand for Soft Shag Carpet (1,000 yd.) 1 2 3 4 5 6 (a) and (b), using MAD. Which one should the dealer use for January of the next year? 7 8 8 12 7 9 15 11 10 12 a. Compute a 3-month moving average fore- cast for months 4 through 9. b. Compute a weighted 3-month moving av- erage forecast for months 4 through 9. As- sign weights of .55, .33, and .12 to the months in sequence, starting with the most recent month. c. Compare the two forecasts by using MAD. Which forecast appears to be more accu- rate?

Fig: 1