Question

Given the attached data. Answer the following questions for a 6 period moving average.

MAD = Average(|A-F|)

TS =SUM(A-F)/MAD

MSE = Average(A-F)2

1. Compute your forecast for period 51.

The potential answers are:

A: 4414 units.

B: 10290.67 units.

C: 8020.83 units.

D: 6324.8 units.

E: 6351.86 units.

2. Compute the MAD value for period 50.

The potential answers are:

A: 2655.35 units.

B: 3753.86 units.

C: 3892.54 units.

D: 3732.56 units.

E: 3205.7 units.

3. Compute standard deviation of forecast for period 51.

The potential answers are:

A: 3319 units.

B: 4666 units.

C: 4866 units.

D: 2660 units.

E: 4007 units.

4. Compute the TS value for period 50.

The potential answers are:

A: -5.8.

B: 2.5.

C: -0.7.

D: -0.2.

E: -1.3.

5. Compute the MSE value for period 50. The potential answers are:

A: 9474272 units.

B: 18872575 units.

C: 20380735 units.

D: 6274108 units.

E: 13546074 units.

6. Compute the standard deviation of demand for period 51 using MSE.

The potential answers are:

A: 4515 units.

B: 4344 units.

C: 4657 units.

D: 2505 units.

E: 3680 units.

(Excel attached data below)

t	At
1	2751
2	6581
3	10658
4	5446
5	8684
6	12896
7	7653
8	5910
9	10607
10	15010
11	11235
12	3866
13	9190
14	4794
15	6408
16	4996
17	12029
18	13516
19	8039
20	10187
21	13176
22	8070
23	5060
24	10542
25	3125
26	10977
27	13051
28	7688
29	16220
30	5333
31	3812
32	2561
33	9289
34	5794
35	7534
36	8041
37	2620
38	1791
39	13253
40	4714
41	7206
42	14435
43	2809
44	18193
45	11674
46	4850
47	4441
48	9661
49	4311
50	13188

Answer 1

In case of 6 period moving average, the forecast for a particular period = the average of the actuals of the previous six periods. In terms of formula, for the 7th period, we calculate the forecast as:

F7 = (A1+A2+A3+A4+A5=A6) /6

Similarly,we calculate the forecasts for all the periods and then calculate the Absolute error which is Absolute difference between the actual and the forecast for that period.

Mean Absolute Deviation (MAD) is the average of all the Absolute Errors

Tracking Signal is the Sum of the Errors divided by the Mean Absolute Deviation

Mean Square Erros (MSE) is the average of the Error Squares

Standard Deviation is the square root of the MSE

Now, we tabulate the working as below and answer the questions :

1. Compute your forecast for period 51.

The answer is C: 8020.83 units.

2. Compute the MAD value for period 50.

The answer is D: 3732.56 units.

3. Compute standard deviation of forecast for period 51.

The answer is Option B 4666 units.

4. Compute the TS value for period 50.

TS = Sum(A-F) / MAD = -2740.50 / 3732.56

The answer is -0.73 and hence option C: -0.7.

5. Compute the MSE value for period 50.

The answer is C: 20380735 units.

6. Compute the standard deviation of demand for period 51 using MSE.

Standard Deviation = Sqrt (MSE) = Sqrt(20380735) = 4514.503 = 4515

The answer is Option A: 4515 units.