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

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.

Posted Date: 3/6/2013 4:38:53 AM | Location : United States







Related Discussions:- Compute the mean absolute deviation and mean square error, Assignment Help, Ask Question on Compute the mean absolute deviation and mean square error, Get Answer, Expert's Help, Compute the mean absolute deviation and mean square error Discussions

Write discussion on Compute the mean absolute deviation and mean square error
Your posts are moderated
Related Questions
six subjects were exposed to 4 treatments and the following data were recorded

discuss the considerations to be born in mind when constracting index numbers


Q. Explain Correlation Coefficient? Ans. The strength of a linear correlation is determined by how precisely the y variable shifts as the x variable increases. The two pi



Reproduction rates: if the majority of births are those of boys the population is bound to decrease while the reverse will be the case if the majority of births are girls. Similar

marginal costing and its break-event analysis

Hanks Western Wear is a western hat retailer in Lubbock, TX.  Though Hanks carries various styles of western hats, every hat has approximately the similar price and invoice (purcha

what does it mean by sales less of goods sold and cost less of goods sold