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) 2s control limits.

How do the naive results compare with the other two forecasts?

Chapter Three Forecasting LO.1