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

Current Liabilities and Payroll , Prior to the last payroll period of the c...

Prior to the last payroll period of the calendar year, the cumulative earnings of Employer A were $105000. The earnings for the last payroll period of the year which will be paid o

Dr. s.n.de, uses of time series with example

uses of time series with example

Probability, Suppose I ask you to pick any four cards at random from a deck...

Suppose I ask you to pick any four cards at random from a deck of 52, without replacement, and bet you one dollar that at least one of the four is a face card (i.e., Jack, Queen, o

Statistics help, Ask question #Minimum 100 words accepteWhen all factors ar...

Ask question #Minimum 100 words accepteWhen all factors are taken into account, an insurance company estimates that the probability of my father making a claim for damages to his p

Kurtosis, define kurtosis with relevant examples

define kurtosis with relevant examples

Obtain the p-value for the value of the test statistic, A study looked at t...

A study looked at the relationship between coronary heart disease (CHD) and coffee consumption in a group of 40-55 year old men. Among the 790 heavy coffee drinkers (at least 100 c

Stability Criterion, Stability Criterion A survey of periodic table caref...

Stability Criterion A survey of periodic table carefully reveals that those elements in which N / Z = 1 or 1.6 are stable. Amongst these, the elements having even N and even Z ar

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

Inventory, An audit of the accounting records of Loch Ness Ltd. for the yea...

An audit of the accounting records of Loch Ness Ltd. for the year ending 30 June 2012 discovered that the ending inventory balance was over-valued by $35,000. Upon further investig

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