A major biotechnology company has developed a new drug for arthritis victims using gene-splicing technology. It has been on the market for five months and has experienced the following sales (in thousands of dollars):
$\begin{array}{|l|c|}
\hline \text { Month } & \text { Sales } \
\hline \text { January } & 26 \
\hline \text { February } & 32 \
\hline \text { March } & 34 \
\hline \text { April } & 34 \
\hline \text { May } & 36 \
\hline
\end{array}$ a. What is the exponential smoothing forecast for May assuming that January sales is also the initial forecast, and the alpha value is 0.5?
b. What is the exponential smoothing forecast for May assuming that January sales is also the initial forecast, and the alpha value is 0.8?
c. What is the mean absolute deviation (MAD) for exponentially smoothed forecasts for the months March to May assuming that January sales is also the initial forecast, and the alpha value is 0.5?
d. What is the MAD for exponentially smoothed forecasts for the months March to May assuming that January sales is also the initial forecast, and the alpha value is 0.8?
e. What is the tracking signal for exponentially smoothed forecasts for the months March to May assuming that January sales is also the initial forecast, and the alpha value is 0.5?
f. What is the tracking signal for exponentially smoothed forecasts for the months March to May assuming that January sales value is 0.8?

Question

A major biotechnology company has developed a new drug for arthritis victims using gene-splicing technology. It has been on the market for five months and has experienced the following sales (in thousands of dollars):
 $\begin{array}{|l|c|}
\hline \text { Month } & \text { Sales } \
\hline \text { January } & 26 \
\hline \text { February } & 32 \
\hline \text { March } & 34 \
\hline \text { April } & 34 \
\hline \text { May } & 36 \
\hline
\end{array}$ a. What is the exponential smoothing forecast for May assuming that January sales is also the initial forecast, and the alpha value is 0.5?
b. What is the exponential smoothing forecast for May assuming that January sales is also the initial forecast, and the alpha value is 0.8?
c. What is the mean absolute deviation (MAD) for exponentially smoothed forecasts for the months March to May assuming that January sales is also the initial forecast, and the alpha value is 0.5?
d. What is the MAD for exponentially smoothed forecasts for the months March to May assuming that January sales is also the initial forecast, and the alpha value is 0.8?
e. What is the tracking signal for exponentially smoothed forecasts for the months March to May assuming that January sales is also the initial forecast, and the alpha value is 0.5?
f. What is the tracking signal for exponentially smoothed forecasts for the months March to May assuming that January sales value is 0.8?

Quizplus · Accepted Answer

The Answer of A major biotechnology company has developed a new drug for arthritis victims using gene-splicing technology. It has been on the market for five months and has experienced the following sales (in thousands of dollars):
 $\begin{array}{|l|c|}
\hline \text { Month } & \text { Sales } \
\hline \text { January } & 26 \
\hline \text { February } & 32 \
\hline \text { March } & 34 \
\hline \text { April } & 34 \
\hline \text { May } & 36 \
\hline
\end{array}$ a. What is the exponential smoothing forecast for May assuming that January sales is also the initial forecast, and the alpha value is 0.5?
b. What is the exponential smoothing forecast for May assuming that January sales is also the initial forecast, and the alpha value is 0.8?
c. What is the mean absolute deviation (MAD) for exponentially smoothed forecasts for the months March to May assuming that January sales is also the initial forecast, and the alpha value is 0.5?
d. What is the MAD for exponentially smoothed forecasts for the months March to May assuming that January sales is also the initial forecast, and the alpha value is 0.8?
e. What is the tracking signal for exponentially smoothed forecasts for the months March to May assuming that January sales is also the initial forecast, and the alpha value is 0.5?
f. What is the tracking signal for exponentially smoothed forecasts for the months March to May assuming that January sales value is 0.8?

A Major Biotechnology Company Has Developed a New Drug for Arthritis