The following table represents sales data for milk (in hundred liters0 sold by a grocery. Do the computations to fill out the table and answer the following questions: 1. Using MAD as the criterion, which of the following models you use for the given time series data? Why? A. Naïve Approach B. 5-month SMA model; C. WMA model with weights 0.1, 0.3, and 0.6; or D. ES model with a = 0.5 and a forecast of 3,500 liters in the first month. NOTE: In answering item 1, mention the whole description of the model; i.e. not just "SMA mode" but "SMA model with n = ..."; not just "WMA model" but "WMA model with weights..."; not just "ES model", "ES model with a = ...". 2. Interpret the MAD of the most accurate among the forecasting models above. 3. Based on your decision in Item 1, what should be the forecast for Month 11? Actual 100 liters Demand SMA F WMA NA |A -F| ES Month 100 liters F JA-F| F |A -F| F A -F| 1 39 47 3 39 4 44 49 48 7 45 56 53 10 61 11 MAD
The following table represents sales data for milk (in hundred liters0 sold by a grocery. Do the computations to fill out the table and answer the following questions: 1. Using MAD as the criterion, which of the following models you use for the given time series data? Why? A. Naïve Approach B. 5-month SMA model; C. WMA model with weights 0.1, 0.3, and 0.6; or D. ES model with a = 0.5 and a forecast of 3,500 liters in the first month. NOTE: In answering item 1, mention the whole description of the model; i.e. not just "SMA mode" but "SMA model with n = ..."; not just "WMA model" but "WMA model with weights..."; not just "ES model", "ES model with a = ...". 2. Interpret the MAD of the most accurate among the forecasting models above. 3. Based on your decision in Item 1, what should be the forecast for Month 11? Actual 100 liters Demand SMA F WMA NA |A -F| ES Month 100 liters F JA-F| F |A -F| F A -F| 1 39 47 3 39 4 44 49 48 7 45 56 53 10 61 11 MAD
Chapter1: Taking Risks And Making Profits Within The Dynamic Business Environment
Section: Chapter Questions
Problem 1CE
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Transcribed Image Text:The following table represents sales data for milk (in hundred liters0 sold by a grocery. Do the
computations to fill out the table and answer the following questions:
1. Using MAD as the criterion, which of the following models you use for the given time series
data? Why?
A. Naïve Approach
B. 5-month SMA model;
C. WMA model with weights 0.1, 0.3, and 0.6; or
D. ES model with a = 0.5 and a forecast of 3,500 liters in the first month.
NOTE: In answering item 1, mention the whole description of the model; i.e. not just "SMA mode" but
"SMA model with n = ..."; not just "WMA model" but "WMA model with weights.."; not just "ES
model", "ES model with a = ..".
2. Interpret the MAD of the most accurate among the forecasting models above.
3. Based on your decision in Item 1, what should be the forecast for Month 11?
Actual
100 liters
SMA
JA-F|
Demand
ES
NA
|A- F|
WMA
Month
100 liters
F
F
F
|A F|
F
JA -F||
1
39
47
3
39
4
44
49
6
48
45
56
9
53
10
61
11
MAD
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