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IV. The following are monthly actual and forecast demand levels for July thru December for units...

IV. The following are monthly actual and forecast demand levels for July thru December for units of a       product manufactured by the N. Tamimi Pharmaceutical Company:

Month      Actual Demand    Forecast Demand

July                           71                              78

August                    80                              75

September          101                           83

October                 84                              84

November            60                              88

December            73                              85

Compute a tracking signal and determine whether the forecasts are in control.

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Answer #1
Month Actual Demand Forecast demand Error Cumulative error Absolute Deviation Sum of AD MAD Tracking Signal
July 71 78 -7 -7 7 7 7 -1.00
Aug 80 75 5 -2 5 12 6 -0.33
Sep 101 83 18 16 18 30 10 1.60
Oct 84 84 0 16 0 30 7.5 2.13
Nov 60 88 -28 -12 28 58 11.6 -1.03
Dec 73 85 -12 -24 12 70 11.67 -2.06
MAD= Sum of Absolute deviation / numbeer of months
Tracking Signal = Cumulative error/ MAD
Answer:- As tracking signal is normal thus the forecast should be considered under control
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