A manager must choose between two alternative forecasting techniques. Both techn

Question

A manager must choose between two alternative forecasting techniques. Both techniques have been used to prepare forecasts for a six- month period. Using MAD as a criterion, which technique provides a more accurate forecast? Pleaw Show work

Month

Demand

Technique 1 Forecast

Technique 2 Forecast

1

492

488

495

2

470

484

482

3

485

480

478

4

493

490

488

5

498

497

492

6

492

493

493

Month

Demand

Technique 1 Forecast

Technique 2 Forecast

1

492

488

495

2

470

484

482

3

485

480

478

4

493

490

488

5

498

497

492

6

492

493

493

Explanation / Answer

for technique 1:

for technique 2:

as mAD of technique 1 is lower; therefore technique1 provides a more accurate forecast.

Month Demand(A) Technique 1 Forecast(F) |A-F| 1 492 488 4 2 470 484 14 3 485 480 5 4 493 490 3 5 498 497 1 6 492 493 1 total 28 MAD =total/6 4.67

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