Jim's Department at a Local Department Store Has Tracked the Sales

question 62

Short Answer

Jim's department at a local department store has tracked the sales of a product over the last ten weeks. Forecast demand using exponential smoothing with an alpha of 0.4, and an initial forecast of 28.0 for period 1. Calculate the MAD. What do you recommend?
$$\begin{array} { | c | c | } \hline \text { Period } & \text { Demand } \\\hline 1 & 24 \\\hline 2 & 23 \\\hline 3 & 26 \\\hline 4 & 36 \\\hline 5 & 26 \\\hline 6 & 30 \\\hline 7 & 32 \\\hline 8 & 26 \\\hline 9 & 25 \\\hline 10 & 28 \\\hline\end{array}$$
$\begin{array}{|c|c|l|l|l|l|}\hline\begin{array}{c}\text { Answer: } \\\text { Period }\end{array} & \text { Demand } & \text { Forecast } & \text { Error } & & \text { Absolute } \\\hline 1 & 24 & 28.00 & & & \\\hline 2 & 23 & 26.40 & -3.40 & & 3.40 \\\hline 3 & 26 & 25.04 & 0.96 & & 0.96 \\\hline 4 & 36 & 25.42 & 10.58 & & 10.58 \\\hline 5 & 26 & 29.65 & -3.65 & & 3.65 \\\hline 6 & 30 & 28.19 & 1.81 & & 1.81 \\\hline 7 & 32 & 28.92 & 3.08 & & 3.08 \\\hline 8 & 26 & 30.15 & -4.15 & & 4.15 \\\hline 9 & 25 & 28.49 & -3.49 & & 3.49 \\\hline 10 & 28 & 27.09 & 0.91 & & 0.91 \\\hline & & \text { Total } & 2.64 & & 32.03 \\\hline & & \text { Average } & 0.29 & & 3.56 \\\hline & & & \text { Bias } & & \text { MAD } \\\hline\end{array}$
The tracking signal RSFE/MAD = 2.64/3.56 = .742 is low; therefore, keep using the forecasting method.

---

Definitions:

Schema

A cognitive framework or concept that organizes and interprets information, helping individuals to understand the world around them.

Peekaboo

A game played with babies where one hides their face, then reveals it while saying "peekaboo," engaging the baby's sense of surprise and joy.

Pacifier

A rubber, plastic, or silicone nipple given to an infant to suck upon in between feedings to quiet its emotions.

Inborn Motor Responses

Reflex actions that babies are born with, which occur automatically in response to certain stimuli.