Two Forecasting Models Were Used to Predict the Future Values $F_{t}$

question 165

Essay

Two forecasting models were used to predict the future values of a time series.These are shown in the accompanying table,together with the actual values.
Forecast Value $F_{t}$ $\quad$ $\quad$ $\quad$ $\quad$ Actual Value $y_{t}$
$\begin{array}{cc|c}\text { Model 1 } & \text { Model } 2 & \\\hline 9.0 & 7.7 & 7.6 \\7.8 & 8.1 & 8.2 \\7.0 & 8.5 & 8.9 \\9.6 & 9.0 & 11.0\end{array}$ Compute the mean absolute deviation (MAD)and sum of squares for forecast (SSE)for each model to determine which was more accurate.

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Definitions:

Strategic Plan

An organized procedure for forecasting a preferred future, and turning this forecast into wide-ranging goals or objectives, followed by a plan of action to accomplish them.

Service-Quality Dimension

Aspects that customers use to evaluate the performance and quality of a service, including reliability, responsiveness, assurance, empathy, and tangibles.

Tangibles

Physical items or properties that can be seen, touched, and measured, as opposed to intangible assets like patents or copyrights.

Reliability

The degree to which a system, component, or process consistently performs according to its intended or designed function.