The Department Manager Using a Combination of Methods Has Forecast

question 104

Essay

The department manager using a combination of methods has forecast sales of toasters at a local department store. Calculate the MAD for the manager's forecast. Compare the manager's forecast against a naive forecast. Which is better?
$\begin{array}{|l|l|l|}\hline\text { Month } & \text { Unit Sales } &\text { Manager's }\\&&\text { Forecast } \\\hline \text { January } & 52 \\\hline \text { February } & 61 \\\hline \text { March } & 73 \\\hline \text { April } & 79 \\\hline \text { May } & 66 \\\hline \text { June } & 51 \\\hline \text { July } & 47 & 50 \\\hline \text { August } & 44 & 55 \\\hline \text { September } & 30 & 52 \\\hline \text { October } & 55 & 42 \\\hline \text { November } & 74 & 60 \\\hline \text { December } & 125 & 75 \\\hline\end{array}$

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Definitions:

Leakage

In economics, the term refers to a situation where income or resources exit an economy or system rather than being retained or reinvested.

Circular Flow

Describes the continuous movement of goods, services, and money between households and businesses in an economy, illustrating how these entities interact in the markets for resources and products.

Gross Domestic Product

The total value of all goods and services produced within a country's borders in a specific time period, serving as a broad measure of economic activity.

Retail Store

A business establishment that sells goods or commodities directly to consumers.