Product Forecast - the ABC Floral Shop - Essay Example

To compare, which of the above forecasts is best; we compare two types of measures of fit Mean Absolute Deviation (MAD) and Mean Squared Deviation (MSD or MSE) for both forecasts. Table 3 shows the MAD and MSE for 3- and 5-moving average forecasts. 

The 3-period moving average forecast is slightly better as compared to the 5-period moving average forecast. This is because the Mean Absolute Deviation (MAD) and Mean Squared Deviation (MSE) for the 3-period moving average forecast are lower as compared to the 5-period moving average forecast.

In conclusion, there is no apparent pattern for the number of geraniums sold during the last 2 weeks by the ABC Floral Shop. The demand forecast using a 3-period moving average is slightly better as compared to the 5-period moving average.