Reference no: EM132274267

Harlen Industries has a simple forecasting model: Take the actual demand for the same month last year and divide that by the number of fractional weeks in that month. This gives the average weekly demand for that month. This weekly average is used as the weekly forecast for the same month this year. This technique was used to forecast eight weeks for this year, which are shown below along with the actual demand that occurred. The following eight weeks show the forecast (based on last year) and the demand that actually occurred: WEEK FORECAST DEMAND ACTUAL DEMAND 1 130 127 2 132 123 3 140 145 4 140 155 5 130 175 6 140 165 7 155 180 8 165 200 a. Compute the MAD of forecast errors. (Round your answers to 2 decimal places.) Week MAD 1 2 3 4 5 6 7 8 b. Using the RSFE, compute the tracking signal. (Round your answers to 2 decimal places. Negative values should be indicated by a minus sign.) Week Tracking Signal 1 2 3 4 5 6 7 8 c. Based on your answers to parts a and b, comment on Harlen’s method of forecasting. The forecast should be considered poor. The forecast should be considered good.