Question

a. What does the MAPE tell a forecaster?

• The average error in a forecast over a specific period of time.
• The quality of the data.
• The number of units of deviation of the actual from the Absolute Error.
• The source of quantitative errors.

b. Which one of the following statements correctly contrasts qualitative and quantitative forecasting?

• Quantitative forecasting is much easier to use than qualitative forecasting.
• Qualitative forecasting’s subjectivity can capture forces at work that quantitative forecasting cannot capture.
• Quantitative forecasting is normally not as accurate as qualitative forecasting.
• Quantitative forecasting methods often contain more important information content than qualitative forecasting methods.

c. Forecasting helps decision makers make the best possible judgments about what type of events?

• future
• immediate
• current
• past

Answer 1

a) Answer: The average error in a forecast over a specific period of time.

The MAPE (Mean Absolute Percent Error) measures the size of the error in percentage terms. It is calculated as the average of the unsigned percentage error. MAPE is a measure of prediction accuracy of a forecasting method in statistics.

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b) Qualitative forecasting’s subjectivity can capture forces at work that quantitative forecasting cannot capture.

Quantitative forecasting requires hard data and number crunching, while qualitative forecasting relies more on educated estimates and expert opinions. Everything cannot be reflected in data and can be found out only by inquiring further (Qualitative forecasting)

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c) future

Forecasting is the process of making predictions of the future based on past and present data and most commonly by analysis of trends.