Forecast Accuracy The company you work for has been working with two different c

Question

Forecast Accuracy The company you work for has been working with two different consulting companies who each provided their own demand forecast for the new product launched earlier this year. The product has been on the market for 5 weeks and below is the actual units sold compared with each consulting company's forecast. WeekActual Sales Clever Consulting Advice & Associates (units) Forecast (units) Forecast (units) 70,256 82,495 98,265 144,235 173,298 91,396 105,624 117,652 131,932 136,215 41,392 71,982 106,261 166,924 175,637 4 5 a) b) c) Calculate the MFE for each forecast. Calculate the MAPE for each forecast. Which consulting company had the better forecast?

Explanation / Answer

advice associates(F2)

MFE(1)= Mean of D1 = -2854

MFE(2) = Mean of D2 = 1270.6

MAPE(1) = 21.55/5=4.31%

MAPE(2) = 15.80/5=3.16%

Advice & associates have better forecast

week actual sales(A) clever consulting(F1)

advice associates(F2)

D1=(A-F1) D2=(A-F2) E1=(ID1I) E2=(ID2I) G1=(E1/A)*100 G2=(E2/A)*100 1 70256 91396 41392 -21140 28864 21140 28864 30.09 41.08 2 82495 105624 71982 -23129 10513 23129 10513 28.03 12.74 3 98265 117652 106261 -19387 -7996 19387 7996 19.72 8.13 4 144235 131932 166924 12303 -22689 12303 22689 8.52 15.73 5 173298 136215 175637 37083 -2339 37083 2339 21.39 1.34 MEAN -2854 1270.6 21.55 15.80

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