Sales of vegetable dehydrators at Bud Banis Sales of vegetable dehydrators at Bu
ID: 404381 • Letter: S
Question
Sales of vegetable dehydrators at Bud Banis
Sales of vegetable dehydrators at Bud Banis' discount department store in St. Louis over the past year are shown below. Management prepared a forecast using a combination of exponential smoothing and its collective judgment for the upcoming four months (March, April, May, and June of 2010). Compute MAPE for management's technique Do management's results outperform (ex have smaller MAPE than) a naive forecast? Which forecast do you recommend, based on lower forecast error?Explanation / Answer
Solution:
a)
Actual
Forecast
Actual
|Actual
|(Actual
Forecast
Forecast|
Forecast)/Actual|
Nave
|Actual
Forecast|
July
100
August
93
100
7
September
96
93
3
October
110
96
14
November
124
110
14
December
119
124
5
January
92
119
27
February
83
92
9
March
101
120
19
19
0.188
83
18
April
96
114
18
18
0.1875
101
5
May
89
110
19
19
0.213
96
7
June
108
108
0
0
0
89
19
56
0.5885
128
MAD=|Actual Forecast|/n
=56/4
=14
MAPE=1/n|(Actual Forecast)/Actual|
=*0.5885
=0.147
=14.7%
b)MAD(nave)=|Actual Forecast|/n
=128/11
=11.64
b)The management did not out performas MAD and MAPE is greater thanna veforecast.
c)I would recommend MAD(nave) as its lowest error.
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