Accurate forecasts are a useful tool in minimizing the risk of overstocking or under stocking in the supply chain.

A. Explain the difference between a qualitative forecast and a time series forecast. [4 marks]

B. The following table contains actual sales of television sets and radios for an electronics store retailer for a period:

Month No. of TVs. No. of radios

Jan 50 30

Feb 60 35

Mar 60 50

April 80 65

May 100 60

June 110 55

July 120 70

Required:

I. Compute a FOUR month moving average for television sets for May, June and July. [6 marks]

II. Compute the Mean Average Deviation (MAD) for the results in I above. [3 marks]

III. Compute a WEIGHTED FOUR month moving average for radios for May, June and July. Weights to be applied are 4,3,2,1 with the highest weight to be applied to the most recent observation [6 marks]

IV. Compute the Mean Average Deviation (MAD) for the results in III above. [3 marks]

C. Explain by comparing the MAD of both products whether television sets or radios would have been forecasted more accurately. [3 marks]