Two different forecasting techniques (F1 and F2) were used to forecast demand for cases of bottled water. Actual demand and the two sets of forecasts are as follows: PREDICTED DEMANDPeriod Demand F1 F21 68 66 662 75 68 683 70 72 704 74 71 725 69 72 746 72 70 767 80 71 788 78 74 80a. Compute MAD for each set of forecasts. Given your results, which forecast appears to be more accurate? Explain.b. Compute the MSE for each set of forecasts. Given your results, which forecast appears to be more accurate?c. In practice, either MAD or MSE would be employed to compute forecast errors. What factors might lead a manager to choose one rather than the other?d. Compute MAPE for each data set. Which forecast appears to be more accurate?
Two different forecasting techniques (F1 and F2) were used to forecast demand for cases of bottled water. Actual demand and the two sets of forecasts are as follows: PREDICTED DEMANDPeriod Demand F1 F21 68 66 662 75 68 683 70 72 704 74 71 725 69 72 746 72 70 767 80 71 788 78 74 80a. Compute MAD for each set of forecasts. Given your results, which forecast appears to be more accurate? Explain.b. Compute the MSE for each set of forecasts. Given your results, which forecast appears to be more accurate?c. In practice, either MAD or MSE would be employed to compute forecast errors. What factors might lead a manager to choose one rather than the other?d. Compute MAPE for each data set. Which forecast appears to be more accurate?
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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Two different
PREDICTED DEMAND
Period Demand F1 F2
1 68 66 66
2 75 68 68
3 70 72 70
4 74 71 72
5 69 72 74
6 72 70 76
7 80 71 78
8 78 74 80
a. Compute MAD for each set of forecasts. Given your results, which forecast appears to be more accurate? Explain.
b. Compute the MSE for each set of forecasts. Given your results, which forecast appears to be more accurate?
c. In practice, either MAD or MSE would be employed to compute forecast errors. What factors might lead a manager to choose one rather than the other?
d. Compute MAPE for each data set. Which forecast appears to be more accurate?
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