The management of an insurance company monitors the number of mistakes made by t

Question

The management of an insurance company monitors the number of mistakes made by telephone service representatives for a company they have subcontracted with the number of mistakes for the past several months appears in this table along with forecasts tor errors made with two different forecasting techniques The column labeled Exponential was created using exponents smoothing with an alpha of 0.30 The column labeled MA is forecast using a moving average of three periods. Using the table above, what is the MAO for months 6 - 10 for the exponential smoothing technique?

Explanation / Answer

For the period 6 -10

Month(n) Mistakes Exponential Forecast Error = Actual - forecast Abs(Forecast Error) Cumulative Abs(Forecast Error) MAD = (Cumulative Absolute value of forecast error / n) cumulative forecast error (Forecast error)^2 Cumulative Forecast Error MSE = Cumulative forecast Error / n 1 55 0.00 2 61 0.00 3 71 0.00 4 77 71.00 6.00 6.00 6.00 1.50 6.00 36.00 36.00 9.00 5 88 73.00 15.00 15.00 21.00 4.20 21.00 225.00 261.00 52.20 6 100 77.00 23.00 23.00 44.00 7.33 44.00 529.00 790.00 131.67 7 109 84.00 25.00 25.00 69.00 9.86 69.00 625.00 1415.00 202.14 8 122 92.00 30.00 30.00 99.00 12.38 99.00 900.00 2315.00 289.38 9 126 101.00 25.00 25.00 124.00 13.78 124.00 625.00 2940.00 326.67 10 126 108.00 18.00 18.00 142.00 14.20 142.00 324.00 3264.00 326.40

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