Problem (Algorithmic)
Consider the following time series data.
| Week |
1 |
2 |
3 |
4 |
5 |
6 |
| Value |
19 |
12 |
15 |
11 |
17 |
14 |
Using the naïve method (most recent value) as the forecast for the next week, compute the following measures of forecast accuracy:
Mean absolute error (MAE)
Mean squared error (MSE)
Mean absolute percentage error (MAPE)
Round your answers to two decimal places.
MAE =
MSE =
MAPE =
Using the average of all the historical data as a forecast for the next period, compute the same three values. Round your answers to two decimal places.
MAE =
MSE =
MAPE =
Which method appears to provide the more accurate forecasts for the historical data?
Average of all the historical data
Explain.
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