IV. The following are monthly actual and forecast demand levels for July thru De
ID: 333082 • Letter: I
Question
IV. The following are monthly actual and forecast demand levels for July thru December for units of a product manufactured by the N. Tamimi Pharmaceutical Company:
Month Actual Demand Forecast Demand
July 71 78
August 80 75
September 101 83
October 84 84
November 60 88
December 73 85
Compute a tracking signal and determine whether the forecasts are in control.
Explanation / Answer
Month Actual Demand Forecast demand Error Cumulative error Absolute Deviation Sum of AD MAD Tracking Signal July 71 78 -7 -7 7 7 7 -1.00 Aug 80 75 5 -2 5 12 6 -0.33 Sep 101 83 18 16 18 30 10 1.60 Oct 84 84 0 16 0 30 7.5 2.13 Nov 60 88 -28 -12 28 58 11.6 -1.03 Dec 73 85 -12 -24 12 70 11.67 -2.06 MAD= Sum of Absolute deviation / numbeer of months Tracking Signal = Cumulative error/ MAD Answer:- As tracking signal is normal thus the forecast should be considered under control
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