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 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:

    FORECAST    DEMAND

1     145            142

2     144            138

3     135            144

4     145            154

5     135            174

6     145            164

7     145            180

8     147            200

a. Compute the MAD of forecast errors.

b. Using RSFE, compute the tracking signal.

c. Based on your answers to parts (a) and (b), comment on Harlen's method of forecasting.

d. Suggest a forecast model that is better than Harlen's one. Compare the MAD of both models.