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

Managing Ashland, calculate the probabilities correct to 6 decimal places. ...

calculate the probabilities correct to 6 decimal places. Let pie = 0.02. a. P(X less than 3,

Appropriate relationship of varibles, How to write it with business implica...

How to write it with business implication of the analysis?

Correlation and regression problems, CORRELATION & REGRESSION: 1)  What...

CORRELATION & REGRESSION: 1)  What do you mean by the term correlation? 2)  Point out the differences between coefficient of correlation and regression. 3)  If the correl

Arithmetic mean, What are the uses of arithmetic mean?

What are the uses of arithmetic mean?

Confidence interval, Questions 1. A genetic experiment with peapods res...

Questions 1. A genetic experiment with peapods resulted in one sample of offspring that consisted of 443 green peapods and 170 yellow peapods.  Construct a 95% confidence inter

Business valuation to determine the stock price of an entity, Definition of...

Definition of business valuation to determine the stock price of an entity. Business valuation is the value or price where a unit would be purchased at a given point in time. Usual

Statistical analysis of hedge funds returns, In this problem set we are goi...

In this problem set we are going to analyze returns of indices for three hedge funds strategies (market neutral, risky arbitrage, long/short). The indices are constructed by CSFB/T

Sequential sampling, Sequential Sampling: This is somewhat complex sample d...

Sequential Sampling: This is somewhat complex sample design where the ultimate size of the sample is not fixed in advance but is determined according to mathematical decisions on t

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