Compute the mean absolute deviation and mean square error, Basic Statistics

Assignment Help:

Toyota Motors introduced a hybrid car Hybrid G in the U.S. market in 2006. In the first three years, the sales of Hybrid G were strong due to the buzz surrounding the hybrid car concept and also lack of competition. Sales of Toyota's Hybrid G started declining in 2009 following the introduction of a new hybrid model by Honda. Toyota is in critical need of a better forecasting method. They need your help to evaluate alternative forecasting methods and provide suggestions. The following table contains the past 12 months' sales data (Note: Month 1 refers to sales made 12 months ago, month 12 refers to sales made last month.)

a. Use a 3-month simple moving average to forecast sales for months 4 to 13. Compute the Mean Absolute Deviation (MAD) and the Mean Square Error (MSE) of the forecasts for months 4 to 12.

b. Using a 3-month weighted average method with weights of 0.5, 0.3 and 0.2 (most recent, next most recent, and third most recent month, respectively) for months 4 to 13. Again, compute the MAD and MSE of the forecasts for months 4 to 12 with the weighted moving average method.

c. Using exponential smoothing method, compute two sets of forecasts for the sales of Hybrid G for months 2 to 13, corresponding to α values of 0.2 and 0.5. Assume that the forecast for month 1 is 1376.

d. Continue part c. Compute the MAD and Mean Absolute Percentage Error (MAPE) using the forecast errors from months 2-12 for each of these two sets of forecasts. Which α value produces a more accurate forecast?

e. Use the trend-adjusted exponential smoothing method to forecast sales for months 2 to 13, assuming S1=1376 and T1=-25 and set α=0.8 and β=0.2.

f. Develop a simple linear regression model using month as the independent variable to forecast the sales of Hybrid G for month 13.


Related Discussions:- Compute the mean absolute deviation and mean square error

Basic statistics, Since you have answered the same below question on 2012, ...

Since you have answered the same below question on 2012, can you provide it to me as free of charge this time? if yes, please send it to me on: Question" Case 1: Decision Analysis

Closing Stock , How to calculate closing stock in Tally while we are postin...

How to calculate closing stock in Tally while we are posting with inventory.

Find confidence interval, A sample of 40 golfers showed that their average ...

A sample of 40 golfers showed that their average on a particular course was 94 with a standard deviation of 6. a. Find the 95% confidence interval of the mean score for all golf

Accounting rate of return, Ghosh Ltd is considering expanding its business ...

Ghosh Ltd is considering expanding its business and has to decide between taking on Project A or Project B. Both projects have a life of four years. Equipment is expected to have

Normal distribution, For a normal distribution why do we calculate the prob...

For a normal distribution why do we calculate the probability of a range of numbers instead of the probability of a single number?

Tandard deviation of the sample of juveniles, The National Marine Fisheries...

The National Marine Fisheries Services is part of the National Oceanic and Atmospheric Administration. NMFS's programs support the conservation and management of living marine reso

Standard deviation, Standard Deviation: The standard deviation is a gauge o...

Standard Deviation: The standard deviation is a gauge of the variance, or dispersion, of the market return over its average returns. Thus Standard Deviation gives an insight of tot

Index number, Why index numbers serve as economic barometers?

Why index numbers serve as economic barometers?

Free hand in measurig trend, advantages and disadvantages of free hand in m...

advantages and disadvantages of free hand in measurig trend

Cash discount., Cash discount A payment received, given if payment is comp...

Cash discount A payment received, given if payment is completed within a stated age of occasion, Refer to TRADE DISCOUNT,

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd