12. A simple forecasting method for weekly sales of flash drives used by a local
ID: 346136 • Letter: 1
Question
12. A simple forecasting method for weekly sales of flash drives used by a local computer dealer is to form the average of the two most recent sales figures. Suppose sales for the drives for the past 12 weeks were Week:2 3 4 7 8 91012 Sales: 86 75 72 83 13265 110 90 67 92 9873 6 a. Determine the one-step-ahead forecasts made for periods 3 through 12 using this method b. Determine the forecast errors for these periods. c. Compute the MAD, the MSE, and the MAPE based on the forecast errors computed in part (b).Explanation / Answer
Please refer to below table filled up with relevant data :
Week
Sales
Forecast
Error
Squared error (SE)
Absolute Deviation (AD)
Percent error (PE)
1
86
2
75
3
72
80.5
-8.5
72.25
8.5
11.81
4
83
73.5
9.5
90.25
9.5
11.45
5
132
77.5
54.5
2970.25
54.5
41.29
6
65
107.5
-42.5
1806.25
42.5
65.38
7
110
98.5
11.5
132.25
11.5
10.45
8
90
87.5
2.5
6.25
2.5
2.78
9
67
100
-33
1089
33
49.25
10
92
78.5
13.5
182.25
13.5
14.67
11
98
79.5
18.5
342.25
18.5
18.88
12
73
95
-22
484
22
30.14
Sum =
4
7175
216
256.10
It may be noted that :
Based on above formula :
Mean Squared error ( MSE ) = Sum of squared error / n = 7175/10 = 717.5
Mean absolute Deviation ( MAD ) = Sum of absolute deviations / n = 216/10 = 21.6
Mean Absolute Percentage Error ( MAPE ) = Sum of Absolute Percentage error /10 = 256.10/10 = 25.61
Week
Sales
Forecast
Error
Squared error (SE)
Absolute Deviation (AD)
Percent error (PE)
1
86
2
75
3
72
80.5
-8.5
72.25
8.5
11.81
4
83
73.5
9.5
90.25
9.5
11.45
5
132
77.5
54.5
2970.25
54.5
41.29
6
65
107.5
-42.5
1806.25
42.5
65.38
7
110
98.5
11.5
132.25
11.5
10.45
8
90
87.5
2.5
6.25
2.5
2.78
9
67
100
-33
1089
33
49.25
10
92
78.5
13.5
182.25
13.5
14.67
11
98
79.5
18.5
342.25
18.5
18.88
12
73
95
-22
484
22
30.14
Sum =
4
7175
216
256.10
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