Question

If you could please provide!! Thank you!!

▪ Necessary and appropriate assumptions (when applicable)

▪ Formulas and graphs

▪ Relevant conclusion(s)

4. .The following table shows predicted product demand using your particular forecasting method along with the actual demand that occurred: FORECAST AcTUAL 1,500 1,550 400500 1,700 1.750 1,800 1,600 1,650 1,700 a. Compute the tracking signal using the mean absolute deviation and running sum of forecast errors. Discuss whether your forecasting method is giving good predictions. b.

Answer 1

Answer:

By using given data,

(A)

We will use below formula as

Deviation = Actual Value - Forecast value. This we need to calculate for each period.

Running sum of forecast errors (RSFE) = Sum of all Deviation = -150

Absolute deviation = Ignore the sign (+/-) of the Deviation value = All the deviation value in plus sign.

Sum of absolute deviation = Sum of all the values of absolute deviations = 450

Mean Absolute deviation (MAD) = Average of absolute deviation = Sum of Deviation / number of periods = 450/5 = 90

TS = Sum of Deviation or RSFE / MAD = -150 / 90 = -1.67

Period	Forecast	Actual	Deviation	RSFE	Absolute Deviation	Sum of Absolute Deviation	MAD	TS
	Fi	Ai	Ei = Ai – Fi		|Ei|	∑|Ei|	∑|Ei|/n	RSFE/MAD
1	1500	1550	50	50	50	50	50.0	1.00
2	1400	1500	100	50+100 = 150	100	50+100 = 150	150/2 = 75.0	2.00
3	1700	1600	-100	150-100 = 50	100	150+100 = 250	250/3 = 83.3	0.60
4	1750	1650	-100	50-100 = -50	100	250+100 = 350	87.5	-0.57
5	1800	1700	-100	-50-100 = -150	100	350+100 = 450	90.0	-1.67

(B)