Sales data of a product is given in the following table:

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Sales data of a product is given in the following table:

Regarding forecast for the month of June, which one of the following statements is TRUE?

1. Moving average will forecast a higher value compared to regression
2. Higher the value of order N, the greater will be the forecast value by moving average.
3. Exponential smoothing will forecast a higher value compared to regression.
4. Regression will forecast a higher value compared to moving average.

Correct Option: D

α = 0.75
D_Jan = 500 D_Feb = 600
F_Jan = 400 units
F_Feb = F_Jan
+ α (D_Jan - F_Jan)
F_Feb = 400 + 0.75(500 - 400)
F_Feb = 475 units
F_March = F_Feb + α (D_Feb - F_Feb)
F_March = 475 + 0.75 (600 - 475) = 568.75
F_March = 569
i.e. 569 cups