Question: Two different forecasting techniques (F1 and F2) were used to forecast demand for cases of bottled water. Actual demand and the two sets of forecasts are as follows:
|
PREDICTED DEMAND
|
| Period |
Demand |
F1 |
F2 |
| 1 |
68 |
65 |
62 |
| 2 |
75 |
65 |
65 |
| 3 |
70 |
74 |
70 |
| 4 |
74 |
69 |
71 |
| 5 |
69 |
72 |
76 |
| 6 |
72 |
68 |
74 |
| 7 |
80 |
73 |
75 |
| 8 |
78 |
75 |
82 |
a. Compute MAD for each set of forecasts. Given your results, which forecast appears to be more accurate? (Round your answers to 2 decimal place.)
MAD F1 _______
MAD F2 _______
b. Compute the MSE for each set of forecasts. Given your results, which forecast appears to be more accurate? (Round your answers to 2 decimal places.)
MSE F1 ______
MSE F2 _______
c. In practice, either MAD or MSE would be employed to compute forecast errors. What factors might lead a manager to choose one rather than the other?
d. Compute MAPE for each data set. Which forecast appears to be more accurate? (Round your intermediate calculations to 2 decimal places and and final answers to 2 decimal places.)
MAPE F1 _____
MAPE F2 ______