Fernandez Colleges

College of Business Administration and Accountancy

Second Semester, School Year 2022 – 2023

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𝐹𝑜𝑟𝑒𝑐𝑎𝑠𝑡 𝐸𝑟𝑟𝑜𝑟 = 𝐴𝑐𝑡𝑢𝑎𝑙 𝑣𝑎𝑙𝑢𝑒 – 𝐹𝑜𝑟𝑒𝑐𝑎𝑠𝑡 𝑣𝑎𝑙𝑢𝑒
Σ |𝑓𝑜𝑟𝑒𝑐𝑎𝑠𝑡 𝑒𝑟𝑟𝑜𝑟|
 𝑆𝑢𝑚 𝑜𝑓 𝑑𝑒𝑚𝑎𝑛𝑑𝑠 𝑖𝑛 𝑝𝑟𝑒𝑣𝑖𝑜𝑢𝑠 𝑛 𝑝𝑒𝑟𝑖𝑜𝑑𝑠

Σ(𝑊𝑒𝑖𝑔ℎ𝑡 𝑖𝑛 𝑝𝑒𝑟𝑖𝑜𝑑 𝑖)(𝐴𝑐𝑡𝑢𝑎𝑙 𝑣𝑎𝑙𝑢𝑒 𝑖𝑛 𝑝𝑒𝑟𝑖𝑜𝑑)

𝐹𝑡+1 =
Σ(Weights)

3 × Sales last month + 2 × Sales two months ago + 1 × Sales three months ago
6
𝑁𝑒𝑤 𝑓𝑜𝑟𝑒𝑐𝑎𝑠𝑡 = 𝐿𝑎𝑠𝑡 𝑝𝑒𝑟𝑖𝑜𝑑′𝑠 𝑓𝑜𝑟𝑒𝑐𝑎𝑠𝑡 + 𝛼(𝐿𝑎𝑠𝑡 𝑝𝑒𝑟𝑖𝑜𝑑′𝑠 𝑎𝑐𝑡𝑢𝑎𝑙 𝑑𝑒𝑚𝑎𝑛𝑑 − 𝐿𝑎𝑠𝑡 𝑝𝑒𝑟𝑖𝑜𝑑′𝑠 𝑓𝑜𝑟𝑒𝑐𝑎𝑠𝑡)

𝑁𝑒𝑤 𝑓𝑜𝑟𝑒𝑐𝑎𝑠𝑡 (𝑀𝑎𝑟𝑐ℎ) = 142 + 0.20(153 − 142) 𝑁𝑒𝑤 𝑓𝑜𝑟𝑒𝑐𝑎𝑠𝑡 (𝑀𝑎𝑟𝑐ℎ)

= 144.2 𝑜𝑟 144 𝑎𝑢𝑡𝑜𝑠
𝑁𝑒𝑤 𝑓𝑜𝑟𝑒𝑐𝑎𝑠𝑡 (𝐴𝑝𝑟𝑖𝑙) = 142.2 + 0.20(136 − 144.2) 𝑁𝑒𝑤 𝑓𝑜𝑟𝑒𝑐𝑎𝑠𝑡 (𝐴𝑝𝑟𝑖𝑙)
= 142.6 𝑜𝑟 143 𝑎𝑢𝑡𝑜𝑠

𝑀𝐴𝐷 = = 10.31

Σ |𝑓𝑜𝑟𝑒𝑐𝑎𝑠𝑡 𝑒𝑟𝑟𝑜𝑟|
𝑀𝐴𝐷 =

𝑛 𝑀𝐴𝐷 = = 12.33
Myrna C. Calma, CPA, Ph.D.
Associate Professor