Problem 15-03 (Algorithmic)

Consider the following time series data.

Week	1	2	3	4	5	6
Value	20	13	16	11	18	15

Using the nave method (most recent value) as the forecast for the next week, compute the following measures of forecast accuracy:

1. Mean absolute error (MAE)
2. Mean squared error (MSE)
3. Mean absolute percentage error (MAPE)

Round your answers to two decimal places.

MAE = _____________

MSE = _____________

MAPE = _____________

Using the average of all the historical data as a forecast for the next period, compute the same three values. Round your answers to two decimal places.

MAE = _____________

MSE = _____________

MAPE = _____________

Which method appears to provide the more accurate forecasts for the historical data?

CHOOSE ONE: Nave method (most recent value)/ Average of all the historical data

Explain.

The input in the box below will not be graded, but may be reviewed and considered by your instructor.

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