ISM Exam INTE Topic 5 Question 15 Discussion

To calculate the Mean Absolute Percentage Error (MAPE), we follow these steps:

1. Find the absolute error for each month.

2. Convert the absolute error to a percentage of the actual demand for each month.

3. Find the average of these percentage errors over the six-month period.

Here's the calculation:

* January: 100,00080,000100,000100=20%left| frac{100,000 - 80,000}{100,000} right| times 100 = 20%100,000100,00080,000100=20%

* February: 105,00090,000105,000100=14.29%left| frac{105,000 - 90,000}{105,000} right| times 100 = 14.29%105,000105,00090,000100=14.29%

* March: 110,000100,000110,000100=9.09%left| frac{110,000 - 100,000}{110,000} right| times 100 = 9.09%110,000110,000100,000100=9.09%

* April: 70,000100,00070,000100=42.86%left| frac{70,000 - 100,000}{70,000} right| times 100 = 42.86%70,00070,000100,000100=42.86%

* May: 90,000110,00090,000100=22.22%left| frac{90,000 - 110,000}{90,000} right| times 100 = 22.22%90,00090,000110,000100=22.22%

* June: 100,00090,000100,000100=10%left| frac{100,000 - 90,000}{100,000} right| times 100 = 10%100,000100,00090,000100=10%

MAPE=(20+14.29+9.09+42.86+22.22+10)6=19.41%20%MAPE = frac{(20 + 14.29 + 9.09 + 42.86 + 22.22 + 10)}{6} = 19.41% approx 20%MAPE=6(20+14.29+9.09+42.86+22.22+10)=19.41%20%

Thus, the MAPE for the six months of data is approximately 20%. Reference:

* Chase, R. B., Jacobs, F. R., & Aquilano, N. J. (2006). Operations Management for Compet-itive Advantage. McGraw-Hill/Irwin.

* Hyndman, R. J., & Athanasopoulos, G. (2018). Forecasting: principles and practice. OTexts.