Two different forecasting techniques (F1 and F2) were used to forecast demand fo
ID: 394261 • Letter: T
Question
Two different forecasting techniques (F1 and F2) were used to forecast demand for cases of bottled water. Actual demand and the two sets of forecasts are as follows:
PREDICTED DEMAND
Compute MAD for each set of forecasts. Given your results, which forecast appears to be more accurate? (Round your answers to 2 decimal place.)
Compute the MSE for each set of forecasts. Given your results, which forecast appears to be more accurate? (Round your answers to 2 decimal places.)
In practice, either MAD or MSE would be employed to compute forecast errors. What factors might lead a manager to choose one rather than the other?
Either one might already be in use, familiar to users, and have past values for comparison. If (Click to select)control chartstracking signals are used, MSE would be natural; if (Click to select)control chartstracking signals are used, MAD would be more natural.
Compute MAPE for each data set. Which forecast appears to be more accurate? (Round your intermediate calculations to 2 decimal places and and final answers to 2 decimal places.)
Two different forecasting techniques (F1 and F2) were used to forecast demand for cases of bottled water. Actual demand and the two sets of forecasts are as follows:
Explanation / Answer
PREDICTED DEMAND Period Demand F1 Abs Deviation Error^2 % Error F2 Abs Deviation Error^2 % Error 1 68 62 6 36 8.82% 63 5 25 7.35% 2 75 69 6 36 8.00% 64 11 121 14.67% 3 70 75 5 25 7.14% 70 0 0 0.00% 4 74 65 9 81 12.16% 66 8 64 10.81% 5 69 75 6 36 8.70% 72 3 9 4.35% 6 72 65 7 49 9.72% 76 4 16 5.56% 7 80 70 10 100 12.50% 77 3 9 3.75% 8 78 70 8 64 10.26% 82 4 16 5.13% MAD 7.13 MAPE 9.66% 4.75 MAPE 6.45% MSE 53.38 32.50 MAD F1 7.13 MAPE F1 9.66% MAD F2 4.75 MAPE F2 6.45% MSE F1 53.38 MSE F2 32.50 Either one might already be in use, familiar to users, and have past values for comparison. If control charts are used, MSE would be natural; if tracking signals are used, MAD would be more natural.
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