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After graduating from college, you and your friends started selling birdhouses made from recycled plastic. The idea has caught on, as shown by the following

After graduating from college, you and your friends started selling birdhouses made from recycled plastic. The idea has caught on, as shown by the following sales figures

Month

Demand

March

2200

April

2300

May

2500

June

3500

July

4000

August

5000

a. (3pts). Develop a forecast model for June through September by using an adjusted exponential smoothing model with =0.6 and =0.3. Assume that the unadjusted forecast (Ft) for May was 2,260 and the trend factor (Tt) for May was 18. (Using two decimals)

Month

Unadjusted exponential smoothing model

Trend factor (Tt)

Adjusted exponential smoothing model

March

April

May

2260

18

June

(0.3*

July

August

September

b (3 pts). Calculate the tracking signals for periods June through August.

Actual demand

Adjusted exponential smoothing model

Forecast error

Absolute deviation

MAD

Tracking signal

June

3500

July

4000

August

5000

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