An analyst must decide between two different forecasting techniques for weekly s
ID: 3042587 • Letter: A
Question
An analyst must decide between two different forecasting techniques for weekly sales of roller blades: a linear trend equation and the naive approach. The linear trend equation is Ft = 127 + 1.8t, and it was developed using data from periods 1 through 10. Based on data for periods 11 through 20 as shown in the table, which of these two methods has the greater accuracy if MAD and MSE are used? (Round your intermediate calculations and final answers to 2 decimal places.)
How do i find the following?
MAD (naive) =
MAD (linear) =
MSE (naive) =
MSE (linear) =
t Units Sold 11 147 12 149 13 151 14 142 15 154 16 151 17 154 18 155 19 161 20 163Explanation / Answer
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t Units Sold naïve forecast error abs error sqr error 11 147 12 149 147 2 2 4 13 151 149 2 2 4 14 142 151 -9 9 81 15 154 142 12 12 144 16 151 154 -3 3 9 17 154 151 3 3 9 18 155 154 1 1 1 19 161 155 6 6 36 20 163 161 2 2 4 40 292 MSE MAD 4.444444 36.5 t Units Sold linear forecast error abs error sqr error 11 147 146.8 0.2 0.2 0.04 12 149 148.6 0.4 0.4 0.16 13 151 150.4 0.6 0.6 0.36 14 142 152.2 -10.2 10.2 104.04 15 154 154 0 0 0 16 151 155.8 -4.8 4.8 23.04 17 154 157.6 -3.6 3.6 12.96 18 155 159.4 -4.4 4.4 19.36 19 161 161.2 -0.2 0.2 0.04 20 163 163 0 0 0 24.4 160 MSE MAD 2.44 17.77778