Question

All based on the first question

Question 36

Use the following data for the next three questions:

	(6,4,3,2)	3P avg	Alpha 0.3	SMA
RSFE	-26	-15	-2	-13
MFE	-6.5	-3	-0.4	-2.1
MAPE	16.22	12.11	14.21	15.3
SDFE	1.5	11.26	11.3	12.2

Which of these four forecasts seems to have the most bias?

Group of answer choices

a.(6,4,3,2)

b.Simple Moving Average

c.Alpha = .3

d.3-period moving average

Question 37

Which of the above forecasts has lowest magnitude in relative terms?

Group of answer choices

a.3-period moving average

b.Simple Moving Average

c.Alpha = .3

d.(6,4,3,2)

Question 38

Which of the above forecasts will have the highest magnitude in actual (absolute) terms?

Group of answer choices

a.(6,4,3,2)

b.Alpha = .3

c.3-period moving average

d.Simple Moving Average

Answer 1

1. a. (6,4,3,2)

RSFE (Running Sum of Forecast Errors) and MFEs (Mean Forecast Error) are indicators of bias. The absolute values of RSFE and MFEs of (6,4,3,2) are the highest. Therefore, it has the most bias. Negative bias means that forecasts are higher than actual.  

2.  a. 3-period moving average

MAPE is an indicator of magnitude of forecast in relative terms. MAPE stands for Mean Absolute Percent Error. MAPE is calculated by taking the average of Absolute Percent Errors. Absolute percent error of a forecast is obtained by dividing the forecast error by the actual. 3P avg has the lowest value of MAPE.

3. a.(6,4,3,2)

Highest magnitude of forecast in absolute terms is indicated by the most negative value of RSFE  and MFE, which is of (6,4,3,2) in this case.