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The MAD for Method 1 = 0.153 thousand gallons (round your response to three decimal places). The mean squared error (MSE) for Method 1 = thousand gallons² (round your response to three decimal places).

The MAD for Method 1 = 0.153 thousand gallons (round your response to three decimal places). The mean squared error (MSE) for Method 1 = thousand gallons² (round your response to three decimal places).

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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The image presents a comparison of two weekly forecasts made by different methods for the number of gallons of gasoline, in thousands, demanded at a local gasoline station. The data is given in thousands of gallons. **Forecast Method 1:** - **Week 1:** Forecast = 0.95, Actual = 0.72 - **Week 2:** Forecast = 1.08, Actual = 0.98 - **Week 3:** Forecast = 0.95, Actual = 1.00 - **Week 4:** Forecast = 1.20, Actual = 0.97 **Forecast Method 2:** - **Week 1:** Forecast = 0.82, Actual = 0.72 - **Week 2:** Forecast = 1.19, Actual = 0.98 - **Week 3:** Forecast = 0.92, Actual = 1.00 - **Week 4:** Forecast = 1.15, Actual = 0.97 **Analytical Observations:** - The Mean Absolute Deviation (MAD) for Method 1 is 0.153 thousand gallons (rounded to three decimal places). - The Mean Squared Error (MSE) for Method 1 requires input for completion, expressed in thousand gallons squared (with instructions to round to three decimal places). These metrics help in evaluating the accuracy of the forecast methods compared to the actual demand levels.
Transcribed Image Text:The image presents a comparison of two weekly forecasts made by different methods for the number of gallons of gasoline, in thousands, demanded at a local gasoline station. The data is given in thousands of gallons. **Forecast Method 1:** - **Week 1:** Forecast = 0.95, Actual = 0.72 - **Week 2:** Forecast = 1.08, Actual = 0.98 - **Week 3:** Forecast = 0.95, Actual = 1.00 - **Week 4:** Forecast = 1.20, Actual = 0.97 **Forecast Method 2:** - **Week 1:** Forecast = 0.82, Actual = 0.72 - **Week 2:** Forecast = 1.19, Actual = 0.98 - **Week 3:** Forecast = 0.92, Actual = 1.00 - **Week 4:** Forecast = 1.15, Actual = 0.97 **Analytical Observations:** - The Mean Absolute Deviation (MAD) for Method 1 is 0.153 thousand gallons (rounded to three decimal places). - The Mean Squared Error (MSE) for Method 1 requires input for completion, expressed in thousand gallons squared (with instructions to round to three decimal places). These metrics help in evaluating the accuracy of the forecast methods compared to the actual demand levels.
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