Question

4. Do the following problems, using data set #3:

(a) Use the naïve forecasting method, the average of historical data method, and a 3-period moving average to estimate values of X.

(b) Calculate the Mean Absolute Error, the Mean Squared Error, and the Mean Absolute Percentage Error for each forecasting method.

(c) Based on your answers to (b), which the best forecasting method?

5. Do the following, using data set #3:

(a) Calculate a linear trend regression for X.

(b) Calculate a quadratic trend regression for X, using a 2-period model.

(c) Calculate the Mean Absolute Error, the Mean Squared Error, and the Mean Absolute Percentage Error for each forecasting method.

(d) Which model is better (a) or (b)? Explain.

#3

year	x
2006	5.8
2005	6.7
2004	6.8
2003	6.4
2002	6
2001	6
2000	6.8
1999	6.6
1998	7
1997	7
1996	6.6
1995	7.7
1994	5
1993	6
1992	7.8
1991	6.4
1990	6
1989	6.79
1988	7.5
1987	6.8

Answer 1