The past monthly demands are shown below. The naive method, that is, the one per

Question

The past monthly demands are shown below. The naive method, that is, the one period moving average method, is applied to make forecasts. What is the mean square error (MSE) of the forecasts? a). - 1.67 b) 275.00 c). 8.33 d). 91.67 What is the mean absolute deviation (MAD) of the forecasts? a). -1.67 b) 25.00 c). 8.33 d) 91.67 If May's demand appears to be 35, what a the residual (error) for May? a). 35 b). 0 c). 68.75 d). 6.25 Which of the following is a similarly between the exponential smoothing method and the moving average method? a). Both methods give different weights to most recent observations. b). Both methods assign weights to all available observations. c). Both methods give equal weight to every observation. d). Both methods continually revise a forecast when a new observation becomes available.

Explanation / Answer

29) option D

30|) option C

31)residual error =actual -forecast =35-35=0

option B

32)

option C is correct

month Demand(A) Forecast(F) |A-F| (A-F)^2 Jan 40 Feb 45 40 5 25 March 50 45 5 25 April 35 50 15 225 total 25 275 mean 8.33 91.67 MAD MSE

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