Question

Sales of quilt covers at Bud Banis's discount department store in Carbondale over the past year are shown below. Management prepared a forecast using a combination of exponential smoothing and its collective judgment for the 4 months (March, April, May, and June): 

Month	Jul	Aug	Sep	Oct	Nov	Dec	Jan	Feb	Mar	Apr	May	Jun
Unit Sales	98	97	96	110	124	120	92	83	101	98	90	110
Management's Forecast	-	-	-	-	-	-	-	-	122	116	110	110

a)  MAD for the forecast developed by the management's technique = _______  sales (round your response to two decimal places).

MAPE for the forecast developed by the management's technique = _______  %(round your response to two decimal places).

b) using the Naive Method, the forecast for period March to June is:

MAD for the naive forecast= _______ sales

MAPE for the forecast developed by the naive approach= _______ % (round your response to two decimal points.) 

MAPE for the forecast developed by the naive approach _______ % (round your response to two decimal places).

c) When comparing MAD for the two approaches, the better forecast is achieved using the _______ 

When comparing MAPE for the two approaches, the better forecast is achieved using the _______ 

Answer 1

a)

for management forecast:

month	unit(A)	Forecast(E )	|A-E|	|A-E|/A
Jul	98
Aug	97
Sep	96
Oct	110
Nov	124
Dec	120
Jan	92
Feb	83
Mar	101	122	21	0.2079
Apr	98	116	18	0.1837
May	90	110	20	0.2222
Jun	110	110	0	0.0000
		average	14.75	15.35%

MAD for forecast developed by management technique =14.75

MAPE for forecast developed by management technique =15.35%

b)

for naive approach:

month	unit(A)	Forecast(E )	|A-E|	|A-E|/A
Jul	98
Aug	97
Sep	96
Oct	110
Nov	124
Dec	120
Jan	92
Feb	83
Mar	101	83	18	0.1782
Apr	98	101	3	0.0306
May	90	98	8	0.0889
Jun	110	90	20	0.1818
		average	12.25	11.99%

MAD for the naive forecast= 12.25%

MAPE for the forecast developed by the naive approach= 11.99%

c) the better forecast is naive in both of the approach