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

HYPOTHESIS TESTING, The fluctuations in the stock market induce some invest...

The fluctuations in the stock market induce some investors to sell and move their money into more stable investments. To determine the degree to which recent fluctuation affected o

Index numbers, What are the advantages and disadvantages of index numbers

What are the advantages and disadvantages of index numbers

Calculate operational variances -planning variances, You have recently join...

You have recently joined XYZ, an international company that produces a wide range of office supplies and stationary goods. In your new role as Group Management Accountant your firs

Armitage-dollmodel, Armitage-Dollmodel The model of carcinogenesis in ...

Armitage-Dollmodel The model of carcinogenesis in which the basic idea is that the essential variable determining the change in the risk is not age, but time period. The model

Demographic characteristics , Data   If you look at the Variable vie...

Data   If you look at the Variable view (at top of screen - select View and select variables), you will see the names of variables and information about each one.  The lab

Completely randomized design, Ask question #MinimumAgency revenues. An econ...

Ask question #MinimumAgency revenues. An economic consultant was retained by a large employment agency in a metropolitan area to develop a regression model for predicting monthly a

How audit works , A methodical selection of the adequate, qualified evident...

A methodical selection of the adequate, qualified evidential issue needed to verify the equity of management''s claims in the fiscal reports or to assess whether management has wis

Calculate bonferroni confidence intervals, The "recoverytime" files record ...

The "recoverytime" files record the time (in days) for male blue-collar workers to recover from a common wrist fracture. Each man was given a questionnaire to complete to determine

Actual velocity, A boat is heading across a river at a velocity of 25 mph. ...

A boat is heading across a river at a velocity of 25 mph. The river is flowing downstream at 10 mph. What is the actual velocity of the boat?

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