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Question: 1. Compute the errors of bias and absolute deviation for the forecasts. Which of the forecasting models is the best?
2. At the ABC Floral Shop, an argument developed between two of the owners, Bob and Henry, over the accuracy of forecasting methods. Bob argued that exponential smoothing with α = .1 would be the best method. Henry argued that the shop would get a better forecast with α = .3.
a. Using F1 = 100 and the data from problem 3, which of the two managers is right?
b. Graph the two forecasts and the original data using Excel. What does the graph reveal?
c. Maybe forecast accuracy could be improved. Try additional values of α = .2, .4, and .5 to see if better accuracy is achieved.
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