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House Actual Price Predicted Price 1 Predicted Price 2 230500 254000 256000 209900 215500 223400 3 258900 240000 228000 4 185500 204000 219400 5 169000 157500 159400 6 350500 325800 339800 7 399900 423600 452500 8 310000 324500 305500 9 195500 180750 193750 10 328900 340000 324500 Question 1) A) Compute the ME, RMSE, MAD, and MAPE for the two prediction models. ME - Model1: ME - Model2: RMSE - Model1: 17714.75 RMSE - Model2: 24397.96 MAD - Model1: 16675 MAD - Model2: 18735 MPE - Model1: MPE - Model2: MAPE - Model1: 6.55 MAPE - Model2: 7.33 B) Are the predictive models overestimating or underestimating the actual selling price on average? Predictive models are the actual selling price on average. (Answer choices: overestimating/underestimating)

House Actual Price Predicted Price 1 Predicted Price 2 230500 254000 256000 209900 215500 223400 3 258900 240000 228000 4 185500 204000 219400 5 169000 157500 159400 6 350500 325800 339800 7 399900 423600 452500 8 310000 324500 305500 9 195500 180750 193750 10 328900 340000 324500 Question 1) A) Compute the ME, RMSE, MAD, and MAPE for the two prediction models. ME - Model1: ME - Model2: RMSE - Model1: 17714.75 RMSE - Model2: 24397.96 MAD - Model1: 16675 MAD - Model2: 18735 MPE - Model1: MPE - Model2: MAPE - Model1: 6.55 MAPE - Model2: 7.33 B) Are the predictive models overestimating or underestimating the actual selling price on average? Predictive models are the actual selling price on average. (Answer choices: overestimating/underestimating)

Practical Management Science
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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C) Compare the predictive models to a base model where every house is predicted to be sold at the average price of all the houses in the training data set, which is $260,500. Do the predictive models built by the real estate company outperform the base model in terms of RMSE? RMSE: The predictive models the base model. (Answer choices: outperform/underperform) D) Which predictive model is the better-performing model? The predictive model is the better performing model. (Answer choices: first/second/base)
Transcribed Image Text:C) Compare the predictive models to a base model where every house is predicted to be sold at the average price of all the houses in the training data set, which is $260,500. Do the predictive models built by the real estate company outperform the base model in terms of RMSE? RMSE: The predictive models the base model. (Answer choices: outperform/underperform) D) Which predictive model is the better-performing model? The predictive model is the better performing model. (Answer choices: first/second/base)
House Actual Price Predicted Price 1 Predicted Price 2 1 230500 254000 256000 209900 215500 223400 258900 240000 228000 4 185500 204000 219400 169000 157500 159400 6 350500 325800 339800 7 399900 423600 452500 8 310000 324500 305500 9 195500 180750 193750 10 328900 340000 324500 Question 1) A) Compute the ME, RMSE, MAD, and MAPE for the two prediction models. ME - Model1: ME - Model2: RMSE - Model1: 17714.75 RMSE - Model2: 24397.96 MAD - Model1: 16675 MAD - Model2: 18735 MPE - Model1: MPE - Model2: MAPE - Model1: 6.55 MAPE - Model2: 7.33 B) Are the predictive models overestimating or underestimating the actual selling price on average? Predictive models are the actual selling price on average. (Answer choices: overestimating/underestimating)
Transcribed Image Text:House Actual Price Predicted Price 1 Predicted Price 2 1 230500 254000 256000 209900 215500 223400 258900 240000 228000 4 185500 204000 219400 169000 157500 159400 6 350500 325800 339800 7 399900 423600 452500 8 310000 324500 305500 9 195500 180750 193750 10 328900 340000 324500 Question 1) A) Compute the ME, RMSE, MAD, and MAPE for the two prediction models. ME - Model1: ME - Model2: RMSE - Model1: 17714.75 RMSE - Model2: 24397.96 MAD - Model1: 16675 MAD - Model2: 18735 MPE - Model1: MPE - Model2: MAPE - Model1: 6.55 MAPE - Model2: 7.33 B) Are the predictive models overestimating or underestimating the actual selling price on average? Predictive models are the actual selling price on average. (Answer choices: overestimating/underestimating)
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