The following are monthly actual and forecast demand levels for May through Dece
ID: 423142 • Letter: T
Question
The following are monthly actual and forecast demand levels for May through December for units of a product manufactured by the D. Bishop Company in Des? Moines:
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Month
Actual Demand
Forecast Demand
May
100100
104104
June
7878
108108
July
112112
101101
August
115115
101101
September
108108
108108
October
114114
106106
November
120120
105105
December
120120
107107
For the given? forecast, the tracking signal? =
_______
MADs ?(round your response to two decimal? places).
Month
Actual Demand
Forecast Demand
May
100100
104104
June
7878
108108
July
112112
101101
August
115115
101101
September
108108
108108
October
114114
106106
November
120120
105105
December
120120
107107
Explanation / Answer
The tracking signal formula = Calculative sum of (actual - forecast)/MAD
Where the MAD =Calculative sum of absolute value of (actual - forecast)/number of months
Now as per the given numbers the all (actual-forecast) for May to December are =
1> 100100 - 104104 = -4004 (MAY)
2> 7878 - 108108 = -100230 (JUNE)
3> 112112 - 101101 = 11011 (JULY)
4> 115115 - 101101 = 14014 (AUGUST)
5> 108108 - 108108 = 0 (SEPTEMBER)
6> 114114 - 106106 = 8008 (OCTOBER)
7> 120120 - 105105 = 15015 (NOVEMBER)
8> 120120 - 107107 = 13013 (DECEMBER)
The absolute value of all (actual-forecast) are = 4004, 100230, 11011, 14014, 0, 8008, 15015, 13013
The sum of all values are = 165295
MAD = 165295/8 = 20661.875 = 20662 (by taking round figure)
Now the calculative sum of all (actual-forecast) are = (-4004-100230+11011+14014+0+8008+15015+13013) = -43173
So the tracking signal is = - 43173/20662 = - 2.0894 = - 2.09 (bytaking round figure).
The answer is = - 2.09
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