iz 1 Operations Management FA2018 Quiz: Quiz 1 This Question: 1 pt 10 of 15 (6 c
ID: 390215 • Letter: I
Question
iz 1 Operations Management FA2018 Quiz: Quiz 1 This Question: 1 pt 10 of 15 (6 complete) Following are two weekly forecasts made by two different methods for the number of galons of gasoline, in thousands, demanded at a local levels, in thousands of gallons: Forecast Actual Forecast Week Method 1 Demand Week Method 2 Demand 0.90 108 0.95 00.70 1.05 0.96 1.22 1.00 0.80 1.20 0 88 1.15 0.70 1.05 0.96 1.00 The MAD for Method 1 8.7 thousand gallons (round your response to thvee decimal places) The mean squared error (MSE) for Method 1housand galona2 (round your response to three decimal places) The MAD for Method 2 thousand galons (round your response to three decimal places) The mean squared ecror (MSE) for Method 2thousand gallons2 (round your response to three decimal places Enter your answer in each of the answer boxes 3 4 0Explanation / Answer
To calculate the Mean absolute deviation and Mean squared error we have to first calculate the error,absolute errors and squared errors for all the periods.
Where,
Error = Actual value - forecasted value
Absolute error = Absolute value of error
Squared error = Square of error
Method 1:
So using the above formula thr errors absolute errors and squared errors for each week in method 1 are
a) Mean absolute deviation = Sum of the absolute errors for all the periods/number of periods
= (0.2+0.03+0.01+0.22) / 4
= 0.46/4
= 0.115 thousand gallons
b) Mean squared error = Sum of the squared errors for all the periods / number of periods
= (0.04+0.001+0.001+0.048) / 4
= 0.09/4
= 0.023 thousand gallons
Method 2:
So using the above formula thr errors absolute errors and squared errors for each week in method 1 are
a) Mean absolute deviation = Sum of the absolute errors for all the periods/number of periods
= (0.1+0.15+0.08+0.15) / 4
= 0.48/4
= 0.120 thousand gallons
b) Mean squared error = Sum of the squared errors for all the periods / number of periods
= (0.01+0.023+0.006+0.023) / 4
= 0.062/4
= 0.016 thousand gallons
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