
Explanation - 60 feet per minute, 10 minutes times 60 feet, answer is 600 feet
The confidence interval is based on
mean square error. T<span>he </span>mean squared error<span> (</span>MSE<span>) </span><span>of an </span>estimator<span> measures the </span>average<span> of the squares of the </span>errors<span> or </span>deviations.<span> MSE is calculated by the formula attached in the picture, where Xbar is a vector of predictions, X is the vector of predicted values. </span>
Answer and explanation:
Given : The demand for a product for the last six years has been 15, 15, 17, 18, 20, and 19. The manager wants to predict the demand for this time series using the following simple linear trend equation : 
To find : What are the forecast errors for the 5th and 6th years?
Solution :
Data : 15, 15, 17, 18, 20, and 19.
The simple linear trend equation is given as, 
For t = 5 years



Observed 
Predicted 
Forecast error = Observed – Predicted = 20 – 22 = -2
Absolute forecast error = |-2| = 2
.
For t = 6 years



Observed 
Predicted 
Forecast error = Observed – Predicted = 19 – 24 = -5
Absolute forecast error = |-5| = 5.