Question

Q3. After graduating from college, Rachel and Payton start selling birdhouses made from recycled plastic. The idea has caught on, as shown by the following sales figures:

Month	Demand
March	2200
April	2240
May	1790
June	4270
July	3530
August	4990

a. (3pts). Develop a forecast model for June through September by using an adjusted exponential smoothing model with α=0.5 and β=0.3. Assume that the unadjusted forecast (Ft) for May was 2,000 and the trend factor (Tt) for May was 700.

Month	Unadjusted exponential smoothing model	Trend factor (Tt)	Adjusted exponential smoothing model
March
April
May	2000	700
June
July
August
September

B (3 pts). Calculate the tracking signals for periods June through August.

	Actual demand	Adjusted exponential smoothing model	Forecast error	Absolute deviation	i=1nFEi	MAD	Tracking signal
June	4270
July	3530
August	4990

Answer 1

Please refer image 1 for answer A:

Please refer image 2 for answer B:

The MAD for period June through August is 884.51

The Tracking Signal for period June through August is 1.209