Help... Question 1 A company has used 2 different methods to forecast sales for

Question

Help...

Question 1

A company has used 2 different methods to forecast sales for the past 5 months. What is the MAD of Method A?

Question 2

Refer to the question above, what is the MAD of Method B?

Question 3

Based your answer to questions 1 to 2 above, which forecasting method performed best?

Question 4

What is the tracking signal for method A?

Question 5

What can be concluded from your answer to the question above?

Period Actual Method A Method B 1 10 10 9 2 8 11 10 3 12 12 8 4 11 13 12 5 12 14 11

Explanation / Answer

Q1) MAD of A is 1.4

Answer is 'd'

Q2) MAD of B is 1.8

Answer is 'e'

Q3) Method 'A' performed best since it has low MAD compared to B

Q4)Tracking signal for method A is -5.

Answer is 'b'

Q5) The tracking signals are between -2 MAD to -5MAD.

The forecast method should be reviewed.

eriod Actual Method A Method B Absolute difference of A Absolute difference of B 1 10 10 9 0 1 2 8 11 10 3 2 3 12 12 8 0 4 4 11 13 12 2 1 5 12 14 11 2 1 Total 7 9 MAD 1.4 1.8

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