Marianne? Kramer,the owner of Handy Man? Rentals,rents carpet cleaners to contra
ID: 422768 • Letter: M
Question
Marianne? Kramer,the owner of Handy Man? Rentals,rents carpet cleaners to contractors and? walk-incustomers. She is interested in arriving at a forecast of rentals so that she can order the correct quantities of supplies that go with the cleaners. Data for the last 10 weeks are shown here.
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Week
1
2
3
4
5
6
7
8
9
10
Rentals
17
18
18
24
20
23
27
32
21
15
a. Prepare a forecast for weeks 6 through 10 by using a
4-week moving average(Enteryour responses rounded to two decimal? places.)
Week
Forecast
6
?
7
?
8
?
9
?
10
?
What is the forecast for week? 11? ? rentals. ?(Enter your response rounded to two decimal? places.)
b. The mean absolute deviationas of the end of week 10 is ?rentals. ?(Enteryour response rounded to two decimal? places.)
Week
1
2
3
4
5
6
7
8
9
10
Rentals
17
18
18
24
20
23
27
32
21
15
Explanation / Answer
Following table illustrates forecast values as well as absolute deviations for week 6 through 10:
WEEK
RENTALS
FORECAST
Absolute deviation
1
17
2
18
3
18
4
24
5
20
6
23
19.4
3.6
7
27
20.6
6.4
8
32
22.4
9.6
9
21
25.2
4.2
10
15
24.6
9.6
11
23.6
SUM =
33.4
Following may be noted :
Ft = ( Rt-1 + Rt-2 + Rt-3 + Rt-4 + Rt-5) / 5
Where ,
Ft = Forecast for week t
Rt-1, Rt-2 , Rt-3 , Rt-4 , Rt-5 = Rentals for period t-1, t-2 , t-3 , t-4 and t-5
Absolute deviation for period t
= absolute difference ( i.e. non negative value ) between Ft and Rt
Forecast for period 11 accordingly = 23.6
Sum of absolute deviation = 33.4
Therefore , Mean Absolute deviation ( MAD ) as of end of week 10
= Sum of absolute deviation values / 5 ( i.e.number of observations )
= 33.4/ 5
= 6.68
WEEK
RENTALS
FORECAST
Absolute deviation
1
17
2
18
3
18
4
24
5
20
6
23
19.4
3.6
7
27
20.6
6.4
8
32
22.4
9.6
9
21
25.2
4.2
10
15
24.6
9.6
11
23.6
SUM =
33.4
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