A Forecaster Is Assessing Two Different Models for Demand

question 15

Essay

A forecaster is assessing two different models for demand. The output from each model and the actual demand data appear in the table. Use MAD and a tracking signal to compare the two models. Which model does a better job of forecasting?
$$\begin{array} { | c | c | c | } \hline \text { Demand } & \text { Model 1 } & \text { Model 2 } \\\hline 52 & 55.0 & 51.0 \\\hline 52 & 54.7 & 51.9 \\\hline 60 & 54.4 & 52.0 \\\hline 56 & 55.0 & 59.2 \\\hline 58 & 55.1 & 56.3 \\\hline 58 & 55.4 & 57.8 \\\hline 52 & 55.6 & 58.0 \\\hline 57 & 55.3 & 52.6 \\\hline 53 & 55.4 & 56.6 \\\hline 57 & 55.2 & 53.4 \\\hline\end{array}$$

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Definitions:

Dominant Strategy

In game theory, a strategy that is best for a player regardless of the strategies chosen by other players.

Advertise

The action or business of promoting and selling products or services, including market research and advertising.

Dominant Strategy

A strategy in game theory that provides the best payoff to a player, regardless of the opponent's moves.

Firm A

A placeholder name often used to denote a generic business entity in theoretical discussions or examples.