Sales of quilt covers at Bud Banis\'s discount department store in Carbondale ov

Question

Sales of quilt covers at Bud Banis's discount department store in Carbondale over the past year are shown below. Management prepared a forecast using a combination of exponential smoothing and its collective judgment for the 4 months (March, April, May, and June): Month Unit Sales Management's Forecast J Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun 9893 96 112 126 119 92 84 102 96 89110 125 116 108 108 a) MAD for the forecast developed by the management's technique16 sales (round your response to two decimal places) MAPE for the forecast developed by the management's technique = 16.64% (round your response to two decimal places) b) Using the Naive Method, the forecast for period March through June is (round your response to two decimal places). Month Unit Sales Naive Forecast Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun 98 93 96 112 126 119 92 8410 9689 110

Explanation / Answer

a) MAD = Sum of the absolute deviation for all the periods / number of periods

Where absolute deviation = absolute value of deviation

Deviation = actual value - forecasted value

So using the above formula the deviation and absolute deviation for March through June are

MAD = (23+20+19+2)/4 = 64/4 = 16

So MAD for the forecast developed by management's technique is 16.

MAPE = Sum of the absolute percentage errors for all the periods / number of periods

Where, absolute percentage error = (absolute deviation / actual value) 100

The absolute deviation for all the periods are calculated above. So the absolute percentage errors for March through June are :

MAPE = (22.55%+20.83%+21.35%+1.82%) / 4

= 66.55% / 4

= 16.64%

b) Using a naive method the forecast for a period is equal to the actual value for the immediately previous period. So using the naive method the forecast for March through June are :

Related Questions

Navigate

• Browse (All)
• Browse S
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.