Sales of vegetable dehydrators at Bud Banis' discount department store in St. Louis over the past year are shown below. Management prepared a forecast using a combination of exponential smoothing and its collective judgment for the upcoming four months (March, April, May, and June of 2010).
Month
July 100
August 93
September 96
October 110
November 124
December 119
January 92
February 83
March 101 120
April 96 114
May 89 110
June 108 108
2009-2010 Unit Sales
July : 100
August :93
September: 96
October: 110
November: 124
December: 119
January :92
February: 83
March: 101
April: 96
May: 89
June: 108
Forecast Managements Forecast ( only has forecast sales for the four following months)
March: 120
April:114
May:110
June:108
(a) Compute MAD and MADE for management's technique
(b) Do management's results outperform (ex have smaller MAD and MAPE than) a naive forecast?
(c) Which forecast do you recommend, based on lower forecast error?