Given the trouble Nina Industries has been having with recent forecast accuracy.
ID: 392991 • Letter: G
Question
Given the trouble Nina Industries has been having with recent forecast accuracy. They have asked you to evaluate the past years forecast method against the sales that actually occurred. In the tables below they are providing the sales for last year and the forecast values that were available at the time. You are to use MAPE to determine the level of accuracy for this forecast. Sales 2212 2914 2650 2711 3001 2855 2698 3372 3447 3721 3890 4022 Last Year 10 12 Last Year Forecast 2413 3078 3036 2602 2900 2991 3389 3378 3623 3856 3765 3482 5 7 10 12Explanation / Answer
MAPE stands for Mean absolute Percentage error.
Absolute Percentage error ( APE ) is calculated as = Absolute difference between Forecast values and actual sales value ( AD) / Sales value x 100
And
MAPE = Sum of Absolute Percentage error/ Number of observations ( Remarks : In the given case, there are 12 observations since there are 12 years involved)
Well will follow following steps to arrive at MAPE:
Please refer below table for relevant data :
Year
Sales
Forecast
Absolute deviation(AD)
Absolute Percent error (APE)
1
2214
2413
199
8.99
2
2914
3078
164
5.63
3
2650
3036
386
14.57
4
2711
2602
109
4.02
5
3001
2900
101
3.37
6
2855
2991
136
4.76
7
2698
3389
691
25.61
8
3372
3378
6
0.18
9
3447
3623
176
5.11
10
3721
3856
135
3.63
11
3890
3765
125
3.21
12
4022
3482
540
13.43
Sum =
92.50
As the calculation suggests , sum of APE = 92.50
Therefore , MAPE = 92.50 /12 = 7.708
The level of accuracy of the forecast as determined by MAPE = 7.708
Year
Sales
Forecast
Absolute deviation(AD)
Absolute Percent error (APE)
1
2214
2413
199
8.99
2
2914
3078
164
5.63
3
2650
3036
386
14.57
4
2711
2602
109
4.02
5
3001
2900
101
3.37
6
2855
2991
136
4.76
7
2698
3389
691
25.61
8
3372
3378
6
0.18
9
3447
3623
176
5.11
10
3721
3856
135
3.63
11
3890
3765
125
3.21
12
4022
3482
540
13.43
Sum =
92.50
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