Question: 1. Develop forecasts using regressions of sales on each of the series of rain forecasts respectively. Calculate the MFE (bias), MAD, and MAPE for the

1. Develop forecasts using regressions of sales on each of the series of rain forecasts respectively. Calculate the MFE (bias), MAD, and MAPE for the two forecasting models. Which rain forecast seems to be better at predicting Rachel’s daily sales, the 5 day forecast or the 2 day forecast?

2. How can Rachel make use of the rain forecasts to improve her forecasts of total sales each day? What other changes to her business would she need to make in order to capitalize on this information?

3. How are order lead time and forecasting accuracy related to each other in this case?

4. Plot and visually inspect the sales data. What other suggestions would you give Rachel for improving her sales forecasts? What type of time series model would be appropriate? Why?

1. Develop forecasts using regressions of sales on each of

Probability of Rain Probability of Rain Total (%) 2 day forecast Sales Day Monday Tuesday Wednesday Thursday Friday Saturday Monday Tuesday Wednesday Thursday Friday Saturday Monday Tuesday Wednesday Thursday Friday Saturday Monday Tuesday Wednesday Thursday Friday Saturday (%) 5 day forecast 10 20 30 50 80 90 60 70 90 100 100 20 10 10 10 50 20 60 20 15 20 20 10 60 5520 4320 4212 4987 5545 6023 4590 4733 4923 4687 5988 6132 5324 4526 5232 5684 5911 6328 4932 5235 5862 4862 6100 6255 40 30 10 40 80 90 30 30 50 100 70 10 10 10 50 70 60 20 15 50 20 80 70

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1 The tables and plots below indicate that the 2day forecast provides better predictions of Rachels daily sales This is to be expected Nearer term forecasts are usually more accurate ie 2day forecast ... View full answer

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