Amazon finds that sales in July are much greater relative to other months because of the Amazon Prime days in that month. Assuming that an exponential smoothing model is used for forecasting sales, what should the company best do to make the forecast for the next month (Aug) more reflective of reality? Please pick from the provided options. F t+1 = αDt + (1-α) Ft
Amazon finds that sales in July are much greater relative to other months because of the Amazon Prime days in that month.
Assuming that an exponential smoothing model is used for
F t+1 = αDt + (1-α) Ft
|
increase value of alpha |
||
|
decrease value of alpha |
||
|
stay with the same alpha |
||
|
decrease the expected forecast for the current month (Ft) |
On hearing our forecast, our clients probe - how sure are we about the forecast? Which measure of errror (among those stated below) should we best use to respond?
| a. |
Root MSE (RMSE)
|
|
| b. |
Mean absolute percentage error (MAPE)
|
|
| c. |
Mean forecast error (Avg. error)
|
|
| d. |
Cumulative forecast error (CFE)
|
Step by step
Solved in 3 steps
