Determine the mean absolute deviation

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Reference no: EM133298200

Assignment:

Month	Actual Sales (Pairs of reading glasses)
January 2021	2800
February 2021	3000
March 2021	5000
April 2021	4000
May 2021	5600
June 2021	8000
July 2021	8000
August 2021	7900
September 2021	6000
October	4050
November 2021	4900
December 2021	5550

Using the sales data of the reading glasses answer the following questions:

1. Calculate the three-month-weighted-moving-average monthly forecasts for the period April 2021 - December 2021. Use weights of 0.5, and 0.2 for the most recent and oldest monthly data respectively and 0.3 for the middle month (show all workings).

2. Determine the Mean Absolute Deviation (MAD) of the three-month-weighted-moving average monthly forecasts for the April - December 2021 period.

a. The linear regression equation of the sales of reading glasses for the 2021 financial year is given by the expression: y = 201.4x + 4091 (where 'y' denotes monthly sales, and 'x', the number representing the month. For example, x = 1, 2, 3, etc., if the month is January, February, March, etc.). Use the regression equation to determine the Mean Absolute Deviation (MAD) of the regression forecasts for the April - December 2021 period.

b. Which of the two methods is better at forecasting the sales of the reading classes? Explain.

Reference no: EM133298200

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