PLEASE ANSWER: WHAT IS THE MAD FOR METHOD 2 AND WHAT IS THE MSE FOR METHOD 2. Fo
ID: 467573 • Letter: P
Question
PLEASE ANSWER: WHAT IS THE MAD FOR METHOD 2 AND WHAT IS THE MSE FOR METHOD 2.
Following are two weekly forecasts made by two different methods for the number of gallons of gasoline, in thousands, demanded at a local gasoline station. Also shown are actual demand levels, in thousands of gallons: The MAD for Method 1 = 0 147 thousand gallons (round your response to three decimal places). The mean squared error (MSE) for Method 1 = 0 028 thousand gallons^2 (round your response to three decimal places). The MAD for Method 2 = thousand gallons (round your response to three decimal places).Explanation / Answer
Forecasting Method 2:
At
Ft
Et = At - Ft
|Et|
(Et)2
Time
Actual Demand
Forecast Method 2
Forecast error (Et)
Absolute Forecast Error
Squared Forecast error
1
0.7
0.80
-0.10
0.10
0.01
2
1.05
1.20
-0.15
0.15
0.02
3
1.07
0.92
0.15
0.15
0.02
4
1.04
1.17
-0.13
0.13
0.02
Total
-0.23
0.53
0.07
Mean Absolute Deviation (MAD) = average of the absolute value of forecast deviation
MAD = 0.53/4 = 0.1325
MAD = 0.1325 thousand gallons
Mean Squared Error (MSE) = average of the squared forecast error
MSE = 0.07/4 = 0.0175
MSE = 0.0175 thousand gallons
At
Ft
Et = At - Ft
|Et|
(Et)2
Time
Actual Demand
Forecast Method 2
Forecast error (Et)
Absolute Forecast Error
Squared Forecast error
1
0.7
0.80
-0.10
0.10
0.01
2
1.05
1.20
-0.15
0.15
0.02
3
1.07
0.92
0.15
0.15
0.02
4
1.04
1.17
-0.13
0.13
0.02
Total
-0.23
0.53
0.07
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