Period Actual Demand Forecast Demand Error ... RSFE MAD t TS Start up Start Up Start Up 15 1 30 45 2 43 3 38 4 37 40
Period Actual Demand Forecast Demand Error ... RSFE MAD t TS Start up Start Up Start Up 15 1 30 45 2 43 3 38 4 37 40
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Calculate the Tracking Signal(RSFE/MAD t) given the following data and an alpha=0.4.MAD t-1=15:
Period Actual Demand Forecast Demand Error ................... RSFE MAD t TS
0 Start up Start Up Start Up 15
1 30 45
2 43
3 38
4 37
5 40

Transcribed Image Text:# Substitute for Mandatory Problem #2 on Exam
Calculate the Tracking Signal (RSFE/MAD\(_t\)) given the following data and an alpha = 0.4, MAD\(_{t-1}\) = 15:
| Period | Actual Demand | Forecast Demand | Error | RSFE | MAD\(_t\) | TS |
|--------|---------------|-----------------|-------|------|----------|----|
| 0 | Start Up | Start Up | Start Up | | 15 | |
| 1 | 30 | 45 | | | | |
| 2 | 43 | | | | | |
| 3 | 38 | | | | | |
| 4 | 37 | | | | | |
| 5 | 40 | | | | | |
### Explanation:
- **Period**: A specific time interval in the sequence of measurements.
- **Actual Demand**: The real demand recorded for each period.
- **Forecast Demand**: The predicted demand made at the start of each period.
- **Error**: The discrepancy between the actual and forecasted demand.
- **RSFE (Running Sum of Forecast Errors)**: The cumulative sum of the forecast errors over time.
- **MAD\(_t\) (Mean Absolute Deviation at time t)**: A measure of the average absolute forecast errors up to period \(t\).
- **TS (Tracking Signal)**: A ratio that indicates whether the forecast is keeping pace with actual demand, calculated as RSFE divided by MAD\(_t\).
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