Problem:
An analyst must decide between two different forecasting techniques for weekly sales of roller blades: a linear trend equation and the naive approach. The linear trend equation is Ft = 127 + 1.8t, and it was developed using data from periods 1 through 10.
Required:
Based on data for periods 11 through 20 as shown in the table, which of these two methods has the greater accuracy if MAD and MSE are used? (Round your answers to 2 decimal places.)
| t |
Units Sold |
| 11 |
147 |
| 12 |
149 |
| 13 |
151 |
| 14 |
142 |
| 15 |
154 |
| 16 |
151 |
| 17 |
154 |
| 18 |
155 |
| 19 |
161 |
| 20 |
163 |
Linear trand provides forecasts with less average error and less average squared error.Solve the given numerical problem and illustrate step by step calculation.