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

Find the probability, Question: (a) Find the number of different words...

Question: (a) Find the number of different words which can be formed with the letters A, A, A, B, B, C, C if (i) there is no restriction (ii) they must st

methods of collecting primary data, Distinguish between primary and second...

Distinguish between primary and secondary data. What are the methods of collecting primary data?

Accounting, How does skewness affect different areas of accounting?

How does skewness affect different areas of accounting?

Budgetary control, Budgetary control The manage or management of a governm...

Budgetary control The manage or management of a governmental component in agreement with an approved budget for the purpose of keeping expenditures within the limits of available

Define the research problem, Choose one of the following four problems depe...

Choose one of the following four problems depending on your area and interest. a. What explains why a particular political candidate wins and his/her opponent loses a tightly co

Pre tax in Statement of Cash Flows, Advanced Equipment leased equipment to ...

Advanced Equipment leased equipment to Richards Chemical, Inc. on 9/30/11. Advanced purchased the machine from Makers, Inc. at a cost of $6M. The 5-yr lease agreement calls for R

Material & labour variances, standard material qty per unit- 2 kg standard ...

standard material qty per unit- 2 kg standard price per kg - 4 rs actual value of material purchased- 4000 rs closing stock- 200 kg actual usage- 2.5 kg finished stock sold- 200 u

Budgetary accounts, Budgetary accounts Accounts used to go through the ado...

Budgetary accounts Accounts used to go through the adopted budget into the all-purpose ledger as part of the administration control method of formal budgetary addition.

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