An analyst must decide between two different forecasting techniques for weekly s
ID: 438379 • 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 = 125 + 2.2t, 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 answers to 2 decimal places.)t Units Sold
11 144
12 145
13 150
14 143
15 157
16 152
17 156
18 154
19 159
20 164
MAD (Naive)
MAD (Linear)
MSE (Naive)
MSE (Linear)
Explanation / Answer
using eqn Ft = 125 +2.2t calculate Ft for values of t ranging from 11 to 20 procedure for calculating MAD find the mean of all values by summing all the values and dividing by total no of values next find the deviation from mean to each of the values and sum them all to get the MAD do this for naive and forecasted methods for MSE , find the mean as mentioned above and then add the squares of deviatons from mean to get MSE do this for both naive and Ft find which one is least that is the answer