1st Edition

ISBN: 9781285187273

Author: Camm, Jeff.

Publisher: Cengage Learning,

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Textbook Question

Chapter 5, Problem 3P

Problems 1 and 2 used different forecasting methods. Which method appears to provide the more accurate forecasts for the historical data? Explain.

1. Consider the following time series data:

Chapter 5, Problem 3P, Problems 1 and 2 used different forecasting methods. Which method appears to provide the more

Using the naïve method (most recent value) as the forecast for the next week, compute the following measures of forecast accuracy:

a. Mean absolute error
b. Mean squared error
c. Mean absolute percentage error
d. What is the forecast for week 7?
2. Refer to the time series data in Problem 1. Using the average of all the historical data as a forecast for the next period, compute the following measures of forecast accuracy:
a. Mean absolute error
b. Mean squared error
c. Mean absolute percentage error
d. What is the forecast for week 7?

Definition Definition Measure of central tendency that is the average of a given data set. The mean value is evaluated as the quotient of the sum of all observations by the sample size. The mean, in contrast to a median, is affected by extreme values. Very large or very small values can distract the mean from the center of the data. Arithmetic mean: The most common type of mean is the arithmetic mean. It is evaluated using the formula: μ = 1 N ∑ i = 1 N x i Other types of means are the geometric mean, logarithmic mean, and harmonic mean. Geometric mean: The nth root of the product of n observations from a data set is defined as the geometric mean of the set: G = x 1 x 2 ... x n n Logarithmic mean: The difference of the natural logarithms of the two numbers, divided by the difference between the numbers is the logarithmic mean of the two numbers. The logarithmic mean is used particularly in heat transfer and mass transfer. ln x 2 − ln x 1 x 2 − x 1 Harmonic mean: The inverse of the arithmetic mean of the inverses of all the numbers in a data set is the harmonic mean of the data. 1 1 x 1 + 1 x 2 + ...

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Chapter 5, Problem 2P

Chapter 5, Problem 4P

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Chapter 5 Solutions

Essentials Of Business Analytics

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Solution Summary: The author explains that the average of all data gives more accurate forecast when compared with forecast obtained by taking the most recent value.

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