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Question & Answer: In this problem, you are to test the validity of your forecasting model. Here are the forecasts for…..

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 750 830 930 930 980 1,030 1.030 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.) Absolute Deviation Sum of Absolute Deviation Week Forecast Actual 880 980 1,030 880 880 1,030 Deviation RSFE 130 280 -380 330 230 305 MAD 130 140 127 108 106 101 TS 130 150 100 130 280 380 430 530 605 750 -130 -150 100 50 100 75 930 100 2.2 75

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: 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.)

Expert Answer

As it can be observed in the Tracking Signal that it is going below the base line which indicates we are having a conservative forecasting. Thus to reduce this gap we have to increase the forecast.

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