Problem 3-19

Harlen Industries has a simple forecasting model: Take the actual demand for the same month last year and divide that by the number of fractional weeks in that month. This gives the average weekly demand for that month. This weekly average is used as the weekly forecast for the same month this year. This technique was used to forecast eight weeks for this year, which are shown below along with the actual demand that occurred.

The following eight weeks show the forecast (based on last year) and the demand that actually occurred:

WEEK	FORECAST DEMAND	ACTUAL DEMAND
1	133	130
2	134	126
3	140	145
4	135	155
5	135	175
6	145	165
7	156	180
8	145	200

a. Compute the MAD of forecast errors. (Round your answers to 2 decimal places.)

Week	MAD
1
2
3
4
5
6
7
8

b. Using the RSFE, compute the tracking signal. (Round your answers to 2 decimal places. Negative values should be indicated by a minus sign.)

Week	Tracking Signal
1
2
3
4
5
6
7
8

c. Based on your answers to parts a and b, comment on Harlens method of forecasting.

	The forecast should be considered poor.
	The forecast should be considered good.