Two Forecasting Models Were Used to Predict the Future Values

question 143

Essay

Two forecasting models were used to predict the future values of a time series. These are shown in the following table, together with the actual values. $$\begin{array} { | c c | c | } { \text { Forecast Value } F _ { t } } && \text { Actual Value } y _ { t } \\\hline \text { Model } 1 & \text { Model } 2 & \\\hline 8.2 & 7.7 & 7.6 \\7.8 & 8.5 & 8.2 \\7.0 & 8.5 & 7.6 \\9.6 & 9.0 & 10.3 \\\hline\end{array}$$ Compute MAD and SSE for each model to determine which was more accurate.

---

Definitions:

Withdrawal of Cash

The act of taking money out from a business by the owners for personal use, not related to business expenses.

Cash Receipts Journal

A financial journal that records all cash coming into the business, providing a record of income from various sources.

Cash Payments Journal

A business ledger documenting every cash disbursement, covering costs, acquisition of assets, and settlement of debts.

Purchases Journal

A specialized accounting journal used to record all purchases of merchandise on credit.