Sales of Vokswagen\'s popular Bele have grown steadily at auto dealerships in Ne

Question

Sales of Vokswagen's popular Bele have grown steadily at auto dealerships in Nevada during the past 5 years (see table below) Sales 450 495 520 563 580 Year 7: 36 a) Forecasted sales for year 6 using a 3-year moving average issales (round your response to one decimal place) b) The MAD for a 3-year moving average based forecast is sales (round your response to one decimal place) c) The MSE for a 3-year moving average based forecast is sales (round your response to the nearest whole number). 120 Sampl A Enter your answer in each of the answer boxes

Explanation / Answer

a) A three period moving average method averages the actual value for the previous three periods to generate the forecast for the next period. This can be calculated as the sum of the actual value for the previous three periods / 3

So using the above formula the forecasted sales of Volkswagen for year 6 = (520+563+580)/3 = 1663/3 = 554.3

To calculate the MAD and MSE we have to calculate the forecast for year 4 and 5 using the above formula. Then we have to calculate the error, absolute errors and squared errors for year 4 and 5.Where,error = actual value - forecasted value

Absolute error = absolute value of error

Squared error = square of error

So using the above formula the forecast for yrar 4 and 5 are

The errors, absolute errors and squared errors for year 4 and 5 are

b) MAD = Sum of the absolute errors for all the periods / number of periods = (74.7+54)/2= 128.7/2 = 64.4

C) MSE = Sum of the squared errors for all the periods / number of periods = (5580.1+2916)/2 = 8496.1/2 = 4248

Related Questions

Navigate

• Browse (All)
• Browse S
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.