Problem 18-21 The following table shows predicted product demand using your part
ID: 469015 • Letter: P
Question
Problem 18-21
The following table shows predicted product demand using your particular forecasting method along with the actual demand that occurred:
Compute the tracking signal using the mean absolute deviation and running sum of forecast errors.(Negative values should be indicated by a minus sign. Round your "Mean Absolute Deviation" to 1 decimal place, "Tracking Signal" to 2 decimal places and all other answers to the nearest whole number.)
The following table shows predicted product demand using your particular forecasting method along with the actual demand that occurred:
Explanation / Answer
Formulae:
Deviation = Actual - Forecast
Running sum of forecast errors (RSFE) = Deviation/ number of period's
Absolute deviation = | Actual - Forecast |
Sum of absolute deviation = Sum of all the values of absolute deviation
Mean Absolute deviation (MAD) = | Actual - Forecast | / n
TS = RSFE / MAD
Deviation = -150
Sum of Absolute deviation = 90
RSFE = -150/5 = -30
MAD = 90/5 = 18
TS = -1.67
Period Forecast Actual Deviation Absolute Deviation 1 1500 1550 50 10 2 1400 1500 100 20 3 1700 1600 -100 20 4 1750 1650 -100 20 5 1800 1700 -100 20 N=5 Sum -150 90