Harlen Industries has a simple forecasing model Take the actual demand for the s

Question

Harlen Industries has a simple forecasing model Take the actual demand for the same month last year and divide that by the number of fractional weeks in that month. This gives the average weskly dermand for hat month, This weekly average is used as the weektyfoecast for the same morth this yea. This technique was used to forecast eight weeks forns year, which are shown below mong wit re den and that occurred The following eight weeks show the forecast (based on last year) and the demand that actualy occumed a Compute the MAD of forecast emors. (Round your answers to 2 decimal places

Explanation / Answer

a.

MAD = Sum of absolute deviation/week

Thus MAD for week 8 = 176/8 = 22

Thus MAD figures are:

b.  

RSFE = sum of the forecast error

TS = RSFE/MAD

Thus for week 8 RSFE = 108+48 = 156 and TS = 156/22 = 7.09

Thus tracking signals are provided below:

c. The forecast should be considered poor. This is because the tracking signal is too large. It is 7.09 for week 8.

Week Forecast demand Actual demand Deviation Absolute deviation Sum of absolute deviations MAD 1 145.00 142.00 -3.00 3.00 3.00 3.00 2 145.00 138.00 -7.00 7.00 10.00 5.00 3 132.00 145.00 13.00 13.00 23.00 7.67 4 155.00 155.00 0.00 0.00 23.00 5.75 5 130.00 175.00 45.00 45.00 68.00 13.60 6 140.00 165.00 25.00 25.00 93.00 15.50 7 145.00 180.00 35.00 35.00 128.00 18.29 8 152.00 200.00 48.00 48.00 176.00 22.00

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