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(Upload) Hw4 #5
(Upload) Hw4 #5
Mean absolute Error MAE= average of the absolute value of forecast errors=Total of Absolute Forecast Errors/N
Mean squared Error MSE= average of the sum of squared forecast errors= Total of Squared Forecast Errors/N
Mean Absolute Percentage Error MAPE= average of the absolute value of percentage forecast errors
18.3
where:
Ft+1= forecast of the times series for period t+1
Yt= actual value of the time series in period t
where:
Ft+1= forecast of the time series for the period t+1
Yt= actual value of the time series in period t
Ft= forecast of the time series for period t
α= smoothing constant (0≤α≤1)
and let:
F2= Y1(to initiate the computations)
Naive Method
Time Absolute Value Squared Absolute Value
Series Forecast of Forecast Forecast Percentage of Percentage
Week Value Forecast Error Error Error Error Error
1 17
2 21 17 4 4 16 19.0476 19.0476
3 19 21 -2 2 4 -10.5263 10.5263
4 23 19 4 4 16 17.3913 17.3913
5 18 23 -5 5 25 -27.7778 27.7778
6 16 18 -2 2 4 -12.5000 12.5000
7 20 16 4 4 16 20.0000 20.0000
8 18 20 -2 2 4 -11.1111 11.1111
9 22 18 4 4 16 18.1818 18.1818
10 20 22 -2 2 4 -10.0000 10.0000
11 15 20 -5 5 25 -33.3333 33.3333
12 22 15 7 7 49 31.8182 31.8182
Totals 5 41 179 1.1904 211.6875
6 16 25
7 20
20
8 18
9 22 15
10 20 10
11 15
5
12 22
13 31 0
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22
14 34 Week
15 31
16 33
17 28
18 32
19 30
20 29
21 34
22 33
17 18 19 20 21 22
Year Sales
1 21.6
2 22.9
3 25.5 34
4 21.9 32
5 23.9
6 27.5 30
7 31.5 28
8 29.7
26
9 28.6
10 31.4 24
22
20
1 2 3 4 5 6 7 8 9 10
Year
8 9 10
Year Revenue
1 23.1
2 21.3
3 27.4 120
4 34.6
100
5 33.8
6 43.2 80
7 59.5
Revenue
8 64.4 60
9 74.2
10 99.3 40
20
0
1 2 3 4 5 6 7 8 9 10
Year
8 9 10
Consider the following data.
Week Value Soluton-a
1 18
2 13
3 16
4 11
5 17
6 14
Construct a time series plot. What type of pattern exists in the data?
The data appears to follow a horizontal pattern
Solution-b
Three-Week Moving Average Calculations
Time Absolute Value Squared
Series Forecast of Forecast Forecast Percentage
Week Value Forecast Error Error Error Error
1 18
2 13
3 16
4 11 15.67 -4.67 4.67 21.78 -42.4242
5 17 13.33 3.67 3.67 13.44 21.5686
6 14 14.67 -0.67 0.67 0.44 -4.7619
MSE= 11.89
Forecast for Week 7 = 14.00
Solution-c
Summary of the Exponential Smoothing Forecasts and Forecast Errors, α=.2
Time
Series Forecast Squared
Month Value Forecast Error Forecast Error
1 18
2 13 18.00 -5.00 25.00
3 16 17.00 -1.00 1.00
4 11 16.80 -5.80 33.64
5 17 15.64 1.36 1.85
6 14 15.91 -1.91 3.66
MSE= 13.0291
Forecast for Week 7 = 15.5296
Solution-d
The three-week moving average provides a more accurate forecast because its MSE is smaller.
Solution-e
MSE= 12.0880
The exponential smoothing forecast using α=.4 provides a better forecast thatn the exponential smoo
20
18
16
14
12
Value
10
8
6
4
2
0
1 2 3 4 5 6 7
Week
Absolute Value
of Percentage
Error
42.4242
21.5686
4.7619
68.75
ast because its MSE is smaller.
r forecast thatn the exponential smoothing forecast using α=.2 since it has a smaller MSE.