Following are two weekly forecasts made by two different methods for the number
ID: 435430 • Letter: F
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:
Week Forecast Method 1 Actual Demand
1 0.95 0.68
2 1.05 1.05
3 0.95 0.96
4 1.20 0.97
Week Forecast Method 2 Actual Demand
1 0.77 0.68
2 1.19 1.05
3 0.92 0.96
4 1.11 0.97
1. The MAD for Method 1? = thousand gallons
2. The mean squared error (MSE) for Method 1=
3. The MAD for method 2 =
4. The mean squared error (MSE) for Method 2=
Explanation / Answer
Method 1
MAD= [{0.95-0.68}+ {1.05-1.05}+{0.95-0.96}+{1.2-0.97}] /4= 0.1225
MSE=[{.27}^2+{0.01}^2+{0.23}^2]/4= 0.031
Method 2
MAD = [ {0.77-0.68} + { 1.19- 1.05} + { 0.92-0.96} +{ 1.11- 0.97}]/4 = 0.825
MSE=[{0.09}^2 + { 0.14}^2 + { 0.04}^2 + {.14}^2]/4 =0.01225