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

Project, The trial balance of the Parton Wholesale Company contained the fo...

The trial balance of the Parton Wholesale Company contained the following accounts at December 31, 2010 the end of the company’s calendar year. PARTON WHOLESALE COMPANY Trial Bala

Automated clearing house (ach) , Automated clearing house (ach) A across ...

Automated clearing house (ach) A across the country settlement and selection program that provides for automated submission and arrangement of resources. Although the phrase Elec

Transitioning from gaap to ifrs, How important do you think knowledge trans...

How important do you think knowledge transfer and training will be to help in transitioning from GAAP to IFRS? Manager 1: Knowledge transfer is going to be extremely importan

Role of accountant, What are the roles of accountant, let me know the caree...

What are the roles of accountant, let me know the career opportunity in accounting subject?

Index number, Why index numbers serve as economic barometers?

Why index numbers serve as economic barometers?

Show appropriate calculations and state the decision rule, Callaway's new d...

Callaway's new driver has been described as illegal because it promises driving distances that exceed USGA standards. Golf Digest conducted a test consisting of nine drives with

Cost accounting question, LO.1 (Activity analysis) The Raleigh plant manage...

LO.1 (Activity analysis) The Raleigh plant manager of Allentown Corp. has noticed the plant frequently changes the schedule on its production line. He has gathered the following in

Define block grant, Define block grant A federal grant that consolidates, ...

Define block grant A federal grant that consolidates, for a wide reason or any type of purpose, funds previously awarded for a wide variety of activities.

Clearing account, Clearing account An account used to build up entire char...

Clearing account An account used to build up entire charges, credits so that they can be disseminated later amongst the accounts to which they are allocable, so that the net diffe

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