Question

In: Advanced Math

Two independent methods of forecasting based on judgment and experience have been prepared each month for...

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
1 830 790 760
2 845 800 795
3 795 805 820
4 825 815 830
5 770 780 795
6 835 790 796
7 785 765 800
8 835 785 835
9 805 800 810
10 855 820 795

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 ±

Solutions

Expert Solution

The naive forecast is very easy. The forecast for next month will be equal to actual sales of current month.for example naive forecast for month 2 is actual sales value of month 1.

MSE = Mean square Error

MAD = Mean Absolute Deviation

RFSE = Running Sum of Forecast Errors

TS = Tracking Signal

all these has been calculated for forecast 1 and forecast 2

- for control limits refer following table and calculation

Colby Messinger answered 2 years ago
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