Consider the following time series data. Year Value 1 234 2 287 3 255 4 310 5 29
ID: 3264778 • Letter: C
Question
Consider the following time series data.
Year
Value
1
234
2
287
3
255
4
310
5
298
6
250
7
456
8
412
9
525
10
436
Using the naïve method (most recent value) as the forecast for the next year, compute the following measures of forecast accuracy.
Mean absolute error
b. Mean squared error
c. Mean absolute percentage error
d. What is the forecast for year 11?
Using the average of all the historical data as a forecast for the next year, compute the following measures of forecast accuracy.
a. Mean absolute error
b. Mean squared error
c. Mean absolute percentage error
d. What is the forecast for year 11?
Using a three-year moving average the historical data as a forecast for the next year, compute the following measures of forecast accuracy.
a. Mean absolute error
b. Mean squared error
c. Mean absolute percentage error
d. What is the forecast for year 11?
Use = 0.2 to compute the exponential smoothing values for the time series.
Mean absolute error
Mean squared error
Mean absolute percentage error
What is the forecast for year 11?
Explain which method you would use and why?
Year
Value
1
234
2
287
3
255
4
310
5
298
6
250
7
456
8
412
9
525
10
436
Explanation / Answer
I think 3-year moving average is best as its MSE is lowest.
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