Ed Rogers Owns an Appliance Store Which Is the Better Forecasting Model, Based on the MAD

question 7

Essay

Ed Rogers owns an appliance store. Sales data on a particular model of a DVD player for the past six months are shown below along with the results of two different forecasting models that were developed t:
$$\begin{array} { l c c c } \text { Month } & \text { Sales } & \text { Forecast 1 } & \text { Forecast 2 } \\\hline \text { Jan } & 35 & 30 & 33 \\\text { Feb } & 29 & 28 & 32 \\\text { Mar } & 39 & 43 & 35 \\\text { Apr } & 42 & 40 & 45 \\\text { May } & 51 & 48 & 52 \\\text { Jun } & 56 & 55 & 52\end{array}$$ Which is the better forecasting model, based on the MAD criterion?

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Definitions:

Similar Products

Items or services that share common features, functions, or characteristics with others, often within the same category.

Demand Factors

Variables that influence the desire and ability of consumers to purchase goods and services, such as price, income levels, and preferences.

Similar Products

Products that fulfill the same needs or wants and are therefore seen as alternatives or competitors to each other.

Consumer Tastes

Preferences or inclinations of consumers that influence their purchasing behavior, often shaped by cultural, social, and personal factors.