Problem 3-20

In this problem, you are to test the validity of your forecasting model. Here are the forecasts for a model you have been using and the actual demands that occurred:

WEEK	FORECAST	ACTUAL
1	720	850
2	800	950
3	900	1,000
4	900	850
5	950	850
6	925	995

a. Use the method stated in the text to compute the MAD and tracking signal for each week. (Negative values should be indicated by a minus sign. Round your "Tracking Signal" to 1 decimal place and all other answers to the nearest whole number.)

Week	Forecast	Actual	Deviation	RSFE	Absolute Deviation	Sum of Absolute Deviation	MAD	TS
1	720	850
2	800	950
3	900	1,000
4	900	850
5	950	850
6	925	995

b. Decide whether the forecasting model you have been using is giving reasonable results.

	The forecasting model is acceptable
	The forecasting model is unacceptable