wo independent methods of forecasting based on judgement and experience have been prepared each month for the past 10 months. The forecasts and actual sales are as follows…
Month Sales Forecast 1 Forecast 2
1 770 771 769
2 789 785 787
3 794 790 792
4 780 784 798
5 768 770 774
6 772 768 770
7 760 761 759
8 775 771 775
9 786 784 788
10 790 788 788
A) Compute the MSe and MAd for each forecast. Does either forecast seem superior? Explain.
B) Compute MAPE for each forecast.
C) Compute a tracking signal for the 10th month for each forecast using the cumulative error for months 1 to 10. Use action limits of +/- 4. Is there bias present? Explain.
D) Compute 2x control limits for each forecast.
E) Prepare a naive forecast for periods 2 through 11 using the given sales data. Compute each of the following; 1) MSE 2) MAD 3) tracking signal at month 10 4) 2x control limits. How do the naive results compare with the other two forecasts?
Plot 3 error control charts for parts c and d.
Discuss comparative conclusions for each technique based on the control charts.
