Question: A manager has been using a certain technique to forecast demand for gallons of ice cream for the past six periods. Actual and forecasted amounts

A manager has been using a certain technique to forecast demand for gallons of ice cream for the past six periods. Actual and forecasted amounts are shown below.

Period

Demand

Forecast

1

85

75

2

96

100

3

102

105

4

85

87

5

74

68

6

69

65

1. What is the MAD for this forecasting technique?

4.83

4.95

4.85

5.05

None of the other options are correct

2. What is the MSE for this forecasting technique?

36.20

29.50

None of the other options are correct

35.55

40.75

3. What is the sigma (or standard deviation) for this forecasting technique?

6.017

3.087

None of the other options are correct

4.025

5.025

4. If the errors are assumed to be normally distributed with CL=0, LCL= -4.5 and UCL= +4.5, the errors

None of the other options are correct

Period 1 and 5

All periods are out of control

Period 2 and 3

Period 1 and 4

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