{Exercise 17.03 (Algorithmic)} Consider the following time series data. Calculat

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{Exercise 17.03 (Algorithmic)}

Consider the following time series data.

Calculate the measures of forecast error using the naive (most recent value) method and the average of historical data (to 2 decimals).

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{Exercise 17.03 (Algorithmic)}

Consider the following time series data.

Week 1 2 3 4 5 6 Value 19 13 17 12 18 15

Calculate the measures of forecast error using the naive (most recent value) method and the average of historical data (to 2 decimals).

Naive method Historical data Mean absolute error Mean squared error Mean absolute percentage error

Which method provides the most accurate forecasts?
SelectNaiveHistorical data

Explanation / Answer

from naive method:

from historical data average:

Historical data method is more accurate

week value(A) forecast(F) |A-F| (A-F)^2 |A-F|/A 1 19 2 13 19 6 36 0.46 3 17 13 4 16 0.24 4 12 17 5 25 0.42 5 18 12 6 36 0.33 6 15 18 3 9 0.20 total 24 122 1.65 average 4.8 24.40 32.94%

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