Question: Computer Services assembles customized personal computers from generic parts. The company has had steady growth since it started. The company assembles computers mostly at night,
Computer Services assembles customized personal computers from generic parts. The company has had steady growth since it started. The company assembles computers mostly at night, using part time students. The company purchase generic computer parts in volume at a discount from a variety of sources whenever they see a good deal. Thus, they need a good forecast of demand for their computers so that they will know how many computer component parts to purchase and stock.
The company has accumulated the demand data in the table below for its computers for the past twelve months, from which it wants to consider exponential smoothing forecasts using smoothing constant equal to 0.30.
Compute for the accuracy of its forecast using MAD?
What is its Mean Absolute Percent Deviation (MAPD)?
The company wants to develop an adjusted exponentially smoothed forecast using the same twelve months of demand. It will use the exponentially smoothed forecast with constant = 0.5 and with a smoothing constant trend of 0.30. What is the forecast in January next year?
| Period | Month | DEMAND | FORECAST | IDt - FtI | Trend | AF |
| 1 | January | 200 |
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| 2 | February | 212 |
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| 3 | March | 214 |
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| 4 | April | 222 |
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| 5 | May | 236 |
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| 6 | June | 221 |
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| 7 | July | 240 |
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| 8 | August | 244 |
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| 9 | September | 250 |
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| 10 | October | 266 |
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| 11 | November | 269 |
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| 12 | December | 273 |
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| 13 | January |
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