Plot the forecast and the demand on a graph.

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Ace Hardware sells spare parts for lawn mowers. The following data were collected for one week in May when replacement lawn-mower blades were in high demand: a. Simulate a forecast for the week, starting with F1 = 10, T0 = 2, α = .2, and β = .4. Use the trend model given in the chapter supplement. b. Compute the MAD and tracking signal for the data. Use MAD0 = 0. c. Are the MAD and tracking signal within tolerances? d. Simulate a forecast using simple smoothing for the week, starting with F1 = 10 and α = .2. Plot the forecast and the demand on a graph. Note how the forecast lags behind demand.

 

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