Consider the following time series data: Week 3 4 5 6 2. 1.
(a). Using the naïve method as the forecast for the next week compute mean absolute error MAE:
Given data represents the observed values of time series data for the weeks 1 through 6.
Naïve approach:
The forecast values using Naïve approach are obtained in the table given below:
MAD:
The MAD (mean absolute deviation) for Naïve approach is obtained as given below:
Thus, the mean absolute error is 4.4.
(b). Using the naïve method as the forecast for the next week compute mean squared error MSE:
The forecast values using Naïve approach are obtained in the table given below:
MSE:
The MSE (mean square error) for Naïve approach is obtained as given below:
Thus, the mean squared error is 20.8.
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