Ace Hardware handles spare parts for lawn mowers. The following data were collected for one week in May when replacement lawn-mower blades were in high demand:
Day Demand
1 ..........10
2 ..........12
3 ..........13
4 ..........15
5 ..........17
6 ..........20
7 ..........21
a. Simulate a forecast for the week, starting with F1 = 10, T0 = 2, α = .2, and β = .4. Use the trend model given in the chapter supplement.
b. Compute the MAD and tracking signal for the data. Use MAD0 = 0.
c. Are the MAD and tracking signal within tolerances?
d. Simulate a forecast using simple smoothing for the week, starting with F1 = 10 and α = .2. Plot the forecast and the data on a graph. Note how the forecast lags behind the data.