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Two independent methods of forecasting based on judgment and experience have been prepared each month for the past 10 months. The forecasts and actual sales are as follows:
Month Sales Forecast 1 Forecast 2 1 770 771 769 2 789 785 787 3 794 790 792 4 780 784 798 5 768 770 774 6 772 768 770 7 760 761 759 8 775 771 775 9 786 784 788 10 790 788 788
a. Compute the MSE and MAD for each forecast. Does either forecast seem superior? Explain. b. Compute MAPE for each forecast. c. Prepare a naive forecast for periods 2 through 11 using the given sales data. Compute each of the following; (1) MSE, (2) MAD, (3) tracking signal at month 10, and (4) 2 s control limits. How do the naive results compare with the other two forecasts?
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