Two different forecasting techniques were used to forecast demand for cases of bottled water in a store. Actual demand and the two sets of forecasts for seven periods are as follows:

Forecast Demand

Period Demand F$1$ F$2$

$1707171$

$2757270$

$3727371$

$4767474$

$5717574$

$6737674$

$7807778$

a$-1.$ Calculate the MAD for each set of forecasts. $($Round the final answers to $2$ decimal places.$)$

F$1$

F$2$

a$-2.$ Which technique appears to be more accurate?

b$-1.$ Calculate the MSE for each set of forecasts. $($Round the final answers to $2$ decimal places.$)$

F$1$

F$2$

b$-2.$ Which technique appears to be more accurate?

c$-1.$ Calculate the MAPE for each set of forecasts. $($Round the final answers to $2$ decimal places.$)$

F$1\%$

F$2\%$

c$-2.$ Which technique appears to be more accurate?

d$-1.$ Do all three of forecast errors provide the same conclusion $($i$.$e$.,$ are they consistent$)$ in this case?

d$-2.$ Do you expect consistent results in every case?

$,$ will have lower MSE than if obs $7$ for F$1$ was $82.$

e$.$ In practice, either MAD, MSE, or MAPE would be employed to compute a measure of forecast errors. What factors might lead a manager to favour one?

MAD

MSE

MAPE

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