Question

The table below shows the actual demand and the forecasted amounts (where available). Use this table to answer questions.

	Actual	Forecast
1	100	-
2	95	-
3	102	-
4	100	105
5	110	111
6	120	115
7	112	115
8	130	125
9	130	128

1. What is the mean absolute deviation for the forecast?
   1. 3.5
   2. 2.33
   3. 3.89
   4. 2.86

2. What is the mean squared error for the forecast (round to two decimal point)?
   1. 89.12
   2. 9.94
   3. 14.83
   4. 4.72
      
3. The table below illustrates the MAD, MAPD, and the MSE for different forecasts. Which forecast method would you recommend?

Forecast Method	MAD	MAPD	MSE
Moving Average	23.2	5.00%	600
Weighted Moving Average	24.9	6.80%	620
Exponential Smoothing, alpha= 0.3	28.1	10.20%	614
Exponential Smoothing, alpha = 0.25	32.6	12.80%	680

1. Moving Average
2. Weighted Moving Average
3. Exponential Smoothing, alpha = 0.3
4. Exponential Smoothing, alpha = 0.25

Answer 1

period	demand	forcast	forecast error=demand value-forecast value	absolute forecast error	squared forcast error
t	Dt	Ft	et=Dt-Ft	| et |	(et)²
1	100
2	95
3	102
4	100	105.00	-5.00	5.00	25.00
4	110	111.00	-1.00	1.00	1.00
6	120	115.00	5.00	5.00	25.00
7	112	115.00	-3.00	3.00	9.00
8	130	125.00	5.00	5.00	25.00
9	130	128.000	2.00	2.00	4.00

	forecast error=demand value-forecast value	absolute forecast error	squared forcast error
	et=Dt-Ft	| et |	(et)²
total sum=	3.00	21.00	89.00
n=	6	6	6
average=	0.50	3.50	14.83

mean absolute deviation for the forecast = MAD =  Σ |et|/n =    3.50

-----------------------

mean squared error for the forecast=MSE=   Σ(et)²/n =    14.83
========================

answer: Moving Average