Answer to Question #152783 in Statistics and Probability for izah

Question

QUESTION:

Weekly sales of copy paper at Cubicle Suppliers are provided in the table below. Compute a three-period moving average, a three-period weighted moving average (most recent period 05, last two period = 0.3, last three period = 0.2) and an exponential smoothing forecast (initial forecast = 26, α = 0.2). Compute the MAD, MSE, MAPE for each forecasting method. Which model is more accurate for week 8 forecast? (please use 3 decimal points)

Week Sales (cases) Forecast
1 27 26
2 28
3 28
4 29
5 29
6 27
7 28
8

Answer:
3MA:
Week Sales (cases) 3MA |MAD| |MSE| |MAPE|
1 27
2 28
3 28
4 29
5 29
6 27
7 28
8
Æ©


3WMA:
Week Sales (cases) 3WMA
(0.5,0.3, 0.2) |MAD| |MSE| |MAPE|
1 27
2 28
3 28
4 29
5 29
6 27
7 28
8
Æ©

Exponential Smoothing:
Week Sales (cases) F
(α = 0.2) |MAD| |MSE| |MAPE|
1 27 26
2 28
3 28
4 29
5 29
6 27
7 28
8
Æ©

Answer 1

3WMA is most accurate as this method yields the lowest MAD, MSE, MAPE.

Calculations:

Answer: 3WMA is most accurate as this method yields the lowest MAD, MSE, MAPE.