Two experienced managers at Wilson Boat, Inc. are resisting the introduction of a computerized exponential smoothing system, claiming that their judgmental forecasts are much better than any computer could do. Their past record of predictions is as follows:

Week      Actual Demand      Manager’s Forecast

1              4,000                      4,500

2              4,200                       5,000

3             4,200                      4,000

4             3,000                      3,800

5             3,800                      3,600

6             5,000                      4,000

7             5,600                      5,000     

8             4,400                      4,800

9             5,000                      4,000

10           4,800                      5,000

a. How would the manager’s forecast compare to a single exponential smoothing forecast using a = 0.4?

b. Based on whatever calculations you think appropriate, are the manager’s judgmental forecasts performing satisfactorily?

c. What other criteria should be used to select a forecasting method for this company?