Individual Assignment (1)

Individual Assignment (1) - Tim O'Brien MGT 302-A...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Tim O’Brien MGT 302-A Individual Assignment 2 3/17/11 Problem 2 (P.267) a. See attached chart b. See attached chart c. When trying to decide which of the two forecasts are better, we have to look at the cumulative sum of forecast errors (CFE) and the mean absolute deviation of forecast errors (MAD) of each chart. Displayed on the chart, we can see that the CFE for the simple moving average chart is 31.3, and the CFE for the weighted moving average is 20.3 (see calculations below). Because we want the CFE to be as close to zero as possible, the weighted moving average forecast method is better. Simple Moving Average CFE= 56.7+(-7.7)+(-21.0)+44.3+(-41.0)= 31.3 Weighted Moving Average CFE= 55.5+(-14.7)+(-22.2)+52.0+(-50.3)=20.3 When using the MAD as a measure for which forecast method is better, we conclude that the simple moving average is the better forecast method. Looking at the charts we can see that the MAD for the simple moving average methods is 34.1, and the MAD for the weighted average method is 38.9 (see calculations below).
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 2

Individual Assignment (1) - Tim O'Brien MGT 302-A...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online