Case Study 1: The AusCandy Demand (10 marks)

The following table shows the historical demand data for product A in AusCandy Co. Answer the

following questions.

Period

Actual

demand Period

Actual

demand

1 77.00 13 57.37

2 45.28 14 80.65

3 48.03 15 52.95

4 47.87 16 61.49

5 78.88 17 46.26

6 51.85 18 71.23

7 53.51 19 56.90

8 58.54 20 72.99

9 49.73 21 57.68

10 61.00 22 45.76

11 50.55 23 45.93

12 50.85

a. Forecast for period 24 using the following three methods: Exponential smoothing with alpha

= 0.25; Moving average with n= 5; and Linear trend (2.5 marks)

b. Using MAD, what is the best forecast method in Part a? (2.5 marks)

c. Based on your answer in Part b, use a tracking signal to see whether there is any bias in error

over time. In case of any bias in error what would be your recommendation? (5 marks)

For tracking signal please

Calculate tracking signal from period 15 onwards.

Use limits of 5 and = 0.20

Important note:

- Use MAD for error calculations

- Brief explanation is required for each question.