Demand Predicted 1 132 113 2 192 200 3 152 150 4 87 102 5 82
The manager of a travel agency has been using a seasonally adjusted forecast to predict demand for packaged tours. The actual and predicted values are as follows:
Period Demand Predicted
1 132 113
2 192 200
3 152 150
4 87 102
5 82 80
6 127 135
7 122 128
8 133 124
9 98 109
10 153 150
11 108 94
12 93 80
13 128 140
14 138 128
a. Compute MAD for the fifth period, then update it period by period using exponential smoothing with α = 0.05.
b. Compute a tracking signal for periods 5 through 14 using the initial and updated MADs.
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