Sales of? Volkswagen\'s popular Beetle have grown steadily at auto dealerships i

Question

Sales of? Volkswagen's popular Beetle have grown steadily at auto dealerships in Nevada during the past 5 years? (see table below).??????????????????????????????????????????????????

Year

Sales

1

455

2

502

3

516

4

555

5

590

?a) Forecasted sales for year 6 using the trend projection? (linear regression) method are 620.5 sales ?(round your response to one decimal? place).

b) What is the MAD?

The MAD for a linear regression forecast is ______ sales ?(round your response to one decimal? place).

c) What is the? MSE?

The MSE for the linear regression forecast is _______sales ?(round your response to one decimal? place).

Year

Sales

1

455

2

502

3

516

4

555

5

590

Explanation / Answer

Calculation of MAD Year Sales (x) (y) Deviation Absolute Deviation absolute sales forecasted sales x-y |x-y| 1 455 620.5 -165.5 165.5 2 502 620.5 -118.5 118.5 3 516 620.5 -104.5 104.5 4 555 620.5 -65.5 65.5 5 590 620.5 -30.5 30.5 484.5 =total of absolute deviation' MAD = (Sum of |x-y|)/n = 484.5/5 = 96.9 Calculation of MSE Year Sales (x) (y) Deviation Squared Error absolute sales forecasted sales x-y (x-y)^2 1 455 620.5 -165.5 27390.25 2 502 620.5 -118.5 14042.25 3 516 620.5 -104.5 10920.25 4 555 620.5 -65.5 4290.25 5 590 620.5 -30.5 930.25 57573.3 =total of squared error' MSE = (Sum of {x-y}^2)/n = 57573.3/5 = 11514.66 With both MAD and MSE, the lower the score, the better

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