Answer:
a) MAD without the forecast = 43.71
MAD with the forecast = 45.59
b) MAPE = 0.097 = 9.7%
Step-by-step explanation:
642 602 656 747 663 618 731 726 679 737 664 740
Mean Absolute deviation is given as
MAD = [Σ|x - μ|]/N
We first calculate the mean
Mean = Σx/N
Mean = (642+602+656+747+663+618+731+726+679+737+664+740)/12
Mean = (8205/12) = 683.75
absolute deviations from the mean
|642-683.75| + |602-683.75| + |656-683.75| + |747-683.75| + |663-683.75| + |618-683.75| + |731-683.75| + |726-683.75| + |679-683.75| + |737-683.75| + |664-683.75| + |740-683.75|
Absolute deviations from the mean
41.75+81.75+27.75+63.25+20.75+65.75+47.25+42.25+4.75+53.25+19.75+56.25
= 524.5
MAD = [Σ|x - μ|]/N
MAD = (524.5/12)
MAD = 43.71
If we include the forecast on the 13th week
642 602 656 747 663 618 731 726 679 737 664 740 747
Mean = (8205+747)/13
Mean = 688.62
absolute deviations from the mean
|642-688.62| + |602-688.62| + |656-688.62| + |747-688.62| + |663-688.62| + |618-688.62| + |731-688.62| + |726-688.62| + |679-688.62| + |737-688.62| + |664-688.62| + |740-688.62| + |747-688.62|
Absolute deviations from the mean
= 46.62+86.62+32.62+58.38+25.62+70.62+42.38+37.38+9.62+48.38+24.62+51.38+58.38
= 592.62
MAD = (592.62/13)
MAD = 45.59.
b) MAPE is used to check forecast errors
MAPE = (1/N) Σ [|x-f|/x]
where N = Sample size = 12
x = each variable
f = the forecasted value = 747
x = 642, 602, 656, 747, 663, 618, 731, 726, 679, 737, 664, 740
Σ [|x-f|/x]
= 0.164+0.241+0.139+0+0.112+0.209+0.022+0.029+0.100+0.014+0.125+0.009
Σ [|x-f|/x] = 1.164
MAPE = (1.164/12)
MAPE = 0.097 = 9.7%
Hope this Helps!!!
