Question

Two independent methods of forecasting based on judgment 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	840	810	795
2	835	780	825
3	810	835	850
4	845	840	840
5	790	775	800
6	845	790	806
7	820	785	810
8	850	770	805
9	830	835	840
10	795	785	810

     

a. Compute the MSE and MAD for each forecast. (Round your answers to 2 decimal places.)

	MSE	MAD
Forecast 1
Forecast 2

   

b. Compute MAPE for each forecast. (Round your intermediate calculations to 5 decimal places and final answers to 4 decimal places.)

MAPE F1	%
MAPE F2	%

c. 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, and (4) 2s control limits. (Round your answers to 2 decimal places.)

MSE
MAD
Tracking signal
Control limits	0 ±
Two independent methods of forecasting based on judgment 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 1 840 810 795 2 835 780 825 3 810 835 850 4 845 840 840 5 790 775 800 6 845 790 806 7 820 785 810 8 850 770 805 9 830 835 840 10 795 785 810       a. Compute the MSE and MAD for each forecast. (Round your answers to 2 decimal places.) MSE MAD Forecast 1 Forecast 2     b. Compute MAPE for each forecast. (Round your intermediate calculations to 5 decimal places and final answers to 4 decimal places.) MAPE F1 % MAPE F2 % c. 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, and (4) 2s control limits. (Round your answers to 2 decimal places.) MSE MAD Tracking signal Control limits 0 ±

Answer 1

for forecast 1)

demand	forecast	forecast error=demand value-forecast value	absolute forecast error	squared forcast error	Abs %error
Dt	Ft	et=Dt-Ft	| et |	(et)²	| et/Dt |
840	810.000	30.00	30.00	900.0	3.57%
835	780	55.00	55.00	3025.0	6.59%
810	835	-25.00	25.00	625.0	3.09%
845	840	5.00	5.00	25.0	0.59%
790	775	15.00	15.00	225.0	1.90%
845	790	55.00	55.00	3025.0	6.51%
820	785	35.00	35.00	1225.0	4.27%
850	770	80.00	80.00	6400.0	9.41%
830	835	-5.00	5.00	25.0	0.60%
795	785	10.00	10.00	100.0	1.26%

=================

for forecast 2)

demand	forecast	forecast error=demand value-forecast value	absolute forecast error	squared forcast error	Abs %error
Dt	Ft	et=Dt-Ft	| et |	(et)²	| et/Dt |
840	795	45.00	45.00	2025.0	5.36%
835	825	10.00	10.00	100.0	1.20%
810	850	-40.00	40.00	1600.0	4.94%
845	840	5.00	5.00	25.0	0.59%
790	800	-10.00	10.00	100.0	1.27%
845	806	39.00	39.00	1521.0	4.62%
820	810	10.00	10.00	100.0	1.22%
850	805	45.00	45.00	2025.0	5.29%
830	840	-10.00	10.00	100.0	1.20%
795	810	-15.00	15.00	225.0	1.89%

a)

	MSE	MAD
forecast 1	1557.5	31.5
forecast 2	782.1	22.9

b)

Mape F1 =    3.7784%
MAPE F2=   2.7571%

c)

period	demand	forecast	forecast error=demand value-forecast value	absolute forecast error	squared forcast error	Abs %error
t	Dt	Ft	et=Dt-Ft	| et |	(et)²	| et/Dt |
1	840
2	835	840	-5.00	5.00	25.0	0.60%
3	810	835	-25.00	25.00	625.0	3.09%
4	845	810	35.00	35.00	1225.0	4.14%
5	790	845	-55.00	55.00	3025.0	6.96%
6	845	790	55.00	55.00	3025.0	6.51%
7	820	845	-25.00	25.00	625.0	3.05%
8	850	820	30.00	30.00	900.0	3.53%
9	830	850	-20.00	20.00	400.0	2.41%
10	795	830	-35.00	35.00	1225.0	4.40%

MSE=   Σ(et)²/n =    1230.56
MAD/MAE=   Σ |et|/n =    31.67

Tracking Signal = |et| / MAD       9