Operations Management: Processes and Supply Chains, 12th Edition

Solved Problem 3

The monthly demand for units manufactured by the Acme Rocket Company has been as follows:

MyLab Operations Management Video

Month	Units	Month	Units
May	100	September	105
June	80	October	110
July	110	November	125
August	115	December	120

1. Use the exponential smoothing method to forecast the number of units for June to January. The initial forecast for May was 105 units; $\alpha =\mathrm{0.2.}$

2. Calculate the absolute percentage error for each month from June through December and the MAD and MAPE of forecast error as of the end of December.

3. Calculate the tracking signal as of the end of December. What can you say about the performance of your forecasting method?

Solution

1. Current Month, t	Calculating Forecast ...