Question

You are given the following budgeted and actual data for the Grey Company for each of the months January through June of the current year. In December of the prior year, sales were forecasted as follows: January, 93 units; February, 88 units; March, 95 units; April, 100 units; May, 107 units; June, 115 units. In January of the current year, sales for the months February through June were reforecasted as follows: February, 83 units; March, 95 units, April, 95 units; May, 97 units; June, 110 units. In February of the current year, sales for the months March through June were reforecasted as follows: March, 90 units, April, 95 units; May, 92 units, June, 110 units. In March of the current year, sales for the months April through June were reforecasted as follows: April, 95 units, May, 87 units; June, 100 units. In April of the current year, sales for the months May and June were reforecasted as follows: May, 77 units; June, 95 units. In May of the current year, sales for June were reforecasted as 95 units. Actual sales for the six-month period, January through June, were as follows: January, 82 units; February, 83 units; March, 94 units; April, 99 units; May, 101 units; June, 110 units. Required: 1. Prepare a schedule of forecasted sales, on a rolling basis, for the months January through June, inclusive. (Hint: There will be only one forecasted number for January—this is the forecast done in December. For February, there will be two forecasts: one done in December and a second done in January. For June, there will be six forecasts, one done in each of the preceding six months.) 2. For each of the months March through June, determine the 3-month forecast error rate, defined as 1 minus the absolute percentage error. For example, the forecast error rate for March's sales is found by dividing the absolute value of the forecast error for this month by the actual sales volume for the month. The forecast error for any month (e.g., March) is defined as the difference between the actual sales volume for the month and the sales volume for that month forecasted 3 months earlier (e.g., December). Also, indicate for each month whether the actual sales volume was above or below the forecasted volume generated three months earlier.

Answer 1

93 88 95 AA в с 1 Month of 2 Forecast Jan Feb 3 Dec 4 Jan 1083 5 Feb 6 March 7 April 8 May Forecast for Month of April May 100 95 95 95 95 90 June 107 97 92 87 77 115 110 110 100 95 9 April May June 101 94 99 110 10 Caption 11 Actual Sales (A) Forecast Error 12 Rate olol -1.06% 4.04% Negative, Actual Positive, Actual Sales Volume Sales Volume was was lower than higher than the 3 the 3 month month forecasted 0 O forecasted sales sales 8.91% 9.09% Positive, Actual Positive, Actual Sales Sales Volume was Volume was higher higher than the 3 than the 3 month month forecasted forecasted sales sales 13 Direction of Error 14 Sales predicted three months 15 earlier (B) Forecast Error (Absolute 16 Amount) C= (A-B) Forecast Error 17 Rate (C/A) 18 100 Positive indicates more sales than forecast and negative depicts less 10 than forecasted sales 9%