Show work please! 2) Multiple choice questions (15 pts each): Which of the follo
ID: 389698 • Letter: S
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Show work please!
2) Multiple choice questions (15 pts each): Which of the following forecasting accuracy measures is most informative with respect to potential bias of the forecasts? a. MAD c. MSE b. Mean error d. MAPE The Bagel Factory sells freshly made bagels in a large variety of flavors. Betty uses exponential smoothing to forecast the daily demand for bagels. Yesterday, the forecasted value was 221 and the actual level of bagel demand was 199. Given a smoothing constant of 0.375, what is Betty's bagel forecast for today? . a. 201.75 b. 207.25 c. 212.75 d. 218.25Explanation / Answer
MAD stands for Mean absolute deviation . Absolute deviation is absolute difference ( i.e. non negative value ) between actual value and forecast value
Mean error is the mean value of errors. Error is “actual value minus forecast value “
MSE stands for Mean Square error.Square error is error squared
MSE standsfor Mean Square Error. Error is calculated as “Actual value minus corresponding forecast value”
MAPEstands for Mean absolute Percentage error . Absolute percentage error is equal to Absolute deviation divided by corresponding actual value .
It thus can be seen that First three highlights difference betweenActual value and forecast value. It is however only MAPE which compares this difference relative to the actual value and thus provides a more comprehensive pictureabout the deviation which others don’t provided.
Basis above logic, would say that MAPE is most informative with respect to potential bias of forecasts .
Answer : D ) MAPE
Betty’s bagel forecast for today
= Smoothing constant xActual level of Bagel demand + ( 1 – smoothing constant) x Forecasted value of Bagel demand
= 0.375 x 199 + ( 1 – 0.375 ) x 221
= 74.625 + 138.125
= 212.75
Answer : c ) 212.75
Answer : D ) MAPE
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