Following are two weekly forecasts made by two different methods for the number

Question

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 = thousand gallons (round your response to three decimal places). The mean squared error (MSE) for Method 1 = thousand gallons^2 (round your response to three decimal places). The MAD for Method 2 = thousand gallons (round your response to three decimal places). The mean squared error (MSE) for Method 2 = thousand gallons^2 (round your response to three decimal places).

Explanation / Answer

So, the MAD for method 1 = 0.116

So, the MSE for method 1 = 0.015

MAD for method 2 = 0.116

So, the MSE for method 2 = 0.020

Method 1 Week Actual demand Actual - Mean Absolute Value 1 0.72 -0.233 0.233 2 0.98 0.027 0.027 3 1.07 0.117 0.117 4 1.04 0.087 0.087 3.81 0.464 Mean 0.953 MAD 0.116

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