Sales of quilt covers at Bud Banis's department store in Carbondale over the past year are shown below. Management prepared a forecast using a combination of exponential smoothing and its collective judgment for the 4 months (March, April, May, and June):
|
MONTH
|
UNIT SALES
|
MANAGMENTS FORECAST
|
|
July
|
100
|
|
|
August
|
93
|
|
|
September
|
96
|
|
|
October
|
110
|
|
|
November
|
121
|
|
|
December
|
119
|
|
|
January
|
92
|
|
|
February
|
83
|
|
|
March
|
101
|
120
|
|
April
|
96
|
114
|
|
May
|
89
|
110
|
|
June
|
108
|
108
|
a) Compute MAD and MAPE for management's technique.
b) Do management's results outperform (i.e., have smaller MAD and MAPE than) a naive forecast?
c) Which forecast do you recommend, based on lower forecast error?