Module 2 Assignment - Worksheet

Assignment – Long Range Planning 3. Evaluate the company’s forecast accuracy over the last FOUR months. Four-month Mean Absolute Deviation Based on their historical forecasting error, how well is HC doing in terms of forecast accuracy? HELPFUL FORMULAS FOR THIS ASSIGNMENT (but be sure to review the video and PowerPoint deck) Utilization = actual output capacity ( 100% ) Capacity Planning: Forecasting: Simple Moving Average: F t = A t-1 + A t-2 + A t-3 + ...+A t-n n Weighted Moving Average: F t = w 1 A t-1 + w 2 A t-2 +w 3 A t-3 + ...+w n A t-n Exponential Smoothing: F t = F t-1 + α (A t-1 - F t-1 ) Forecast Error: MAD= ∑ t=1 n | A t -F t | n F t Forecast of demand for the coming time period F t – 1 Forecast of demand for the previous time period A t Actual demand in the current time period A t – 1 Actual demand in the previous time period w Weight factor MONTH ACTUAL DEMAND FORECAST OF DEMAND DIFFERENCE ABSOLUTE DIFFERENCE May 2023 5,980 5,805 June 2023 6,555 7,090 July 2023 6,670 7,440 August 2023 7,245 7,775