The manager of a travel agency has been using a seasonally adjusted forecast to predict demand for packaged tours

QUESTION:

The manager of a travel agency has been using a seasonally adjusted forecast to predict demand for packaged tours. The actual and predicted values are as follows:

a. Compute MAD for the fifth period, then update it period by period using exponential smoothing with α = .3.

b. Compute a tracking signal for periods 5 through 14 using the initial and updated MADs. If limits of ± 4 are used, what can you conclude?


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