Question

The table below shows the results of two methods (Forecast 1 and Forecast 2) of forecasting for frozen prepared dinners, as well as the demand for the five periods.

        

		PREDICTED DEMAND
Period	Demand	F1	F2
1	68	67	65
2	75	72	64
3	70	72	70
4	74	67	70
5	69	75	74
6	72	67	79
7	80	74	77
8	78	73	81

        

a.	Compare the accuracy of Forecast 1 and Forecast 2 by calculating the Mean Absolute Deviation for each one. Which is more accurate? (Round your answers to 2 decimal places.)

        

MAD F1
MAD F2

         

    (F1, F2, or None) appears to be more accurate.

        

b.	Compare the accuracy of Forecast 1 and Forecast 2 by calculating the Mean Squared Error for each one. Which is more accurate? (Round your answers to 2 decimal places.)

        

MSE F1
MSE F2

        

    (F1, F2, or None) appears to be more accurate.

         

c.	Managers can use either of these error methods to compare forecasts. In what situation would someone use MAD? MSE? Hint: MSE goes with control charts; MAD goes with tracking signals.

        

Either one might already be in use, familiar to users, and have past values for comparison. If (tracking signals OR control charts) are used, MSE would be natural; if (tracking signals OR control charts) are used, MAD would be more natura

        

d.	Compare the accuracy of Forecast 1 and Forecast 2 by calculating the Mean Absolute Percent Error for each one. Which is more accurate? (Round your intermediate calculations to 2 decimal places and and final answers to 2 decimal places.)

         

MAPE F1
MAPE F2

       

    (F1, F2, or None) appears to be more accurate.

Answer 1