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Media Consultants uses proven techniques to measure forecast accuracy and to determine when the forecast needs to be reviewed/updated. The following data has been extracted from their information system: Month 1 2 3 4 5 6 7 8 9 10 11 12 13. 14 15 16 17 18 19 20 Actual Sales ($million) 22 22 22 22 24 24 24 23 23 23 23 22 22 22 22 21 21 20 20 20 Forecast ($million) 30 24 18 15 15 19 24 26 32 27 22 16 14 18 21 23 25 28 25 21 a). Compute a tracking signal for months 11 through 20. Compute an initial value of MAD for month 11, and then update it for each month using exponential smoothing with alpha-.1. What can you conclude? Assume limits of +/-4. b). Using the first half of the data construct a control chart with 2s limits. What can you conclude? c). Plot the last 10 errors on the control chart. Are the errors random? What is the implication of this? Media Consultants uses proven techniques to measure forecast accuracy and to determine when the forecast needs to be reviewed/updated. The following data has been extracted from their information system: Month 1 2 3 4 5 6 7 8 9 10 11 12 13. 14 15 16 17 18 19 20 Actual Sales ($million) 22 22 22 22 24 24 24 23 23 23 23 22 22 22 22 21 21 20 20 20 Forecast ($million) 30 24 18 15 15 19 24 26 32 27 22 16 14 18 21 23 25 28 25 21 a). Compute a tracking signal for months 11 through 20. Compute an initial value of MAD for month 11, and then update it for each month using exponential smoothing with alpha-.1. What can you conclude? Assume limits of +/-4. b). Using the first half of the data construct a control chart with 2s limits. What can you conclude? c). Plot the last 10 errors on the control chart. Are the errors random? What is the implication of this?
Expert Answer:
Answer rating: 100% (QA)
a Use the following expression to compute the exponentially smoothened MAD MAD ale 1 aMADt1 The trac... View the full answer
Related Book For
Intermediate Accounting Reporting and Analysis
ISBN: 978-1285453828
2nd edition
Authors: James M. Wahlen, Jefferson P. Jones, Donald Pagach
Posted Date:
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