Problem $3-21($Algo$)$

Two different forecasting techniques $($F$1$ and F$2)$ were used to forecast demand for cases of bottled water. Actual demand and the two

sets of forecasts are as follows:

Click here for the Excel Data File

a$.$ Compute MAD for each set of forecasts. Given your results, which forecast appears to be more accurate?

Note: Round your answers to $2$ decimal places.

MAD $F1$

MAD $F2$

appears to be more accurate.

b$.$ Compute the MSE for each set of forecasts. Given your results, which forecast appears to be more accurate?

Note: Round your answers to $2$ decimal places.

c$.$ In practice, either MAD or MSE would be employed to compute forecast errors. What factors might lead a manager to choose one

rather than the other?

Ether one might already be in use, familiar to users, and have past values for comparison. If

are used, MSE would be natural; if

are used, MAD would be more natural.

are used, MAD would be more natural.

d$.$ Compute MAPE for each data set. Which forecast appears to be more accurate?

Note: Round your intermediate calculations to $2$ decimal places and and final answers to $2$ decimal places.