Question

In: Statistics and Probability

Considering the following time series data: (Tableau) Determine the least squares trend equation. Use a linear...

Considering the following time series data: (Tableau)

  1. Determine the least squares trend equation. Use a linear equation and any other non- linear equation. Provide R-squared for both cases.

  2. Estimate the price of gold (ounce) for 2020. Does this seem like a reasonable estimate based on historical data?

  3. What is the quality of the forecast? Also, Provide Mean Absolute Error (MAE), and the Mean Absolute Percentage Error (MAPE).

Year

Price of Gold (ounce)

2005

$513.00

2006

$635.70

2007

$836.50

2008

$869.75

2009

$1,087.50

2010

$1,420.25

2011

$1,531.00

2012

$1,664.00

2013

$1,204.50

2014

$1,199.25

2015

$1,060.00

Please provide step by step tabulea solution and output.

Solutions

Expert Solution

x y (x-x̅)² (y-ȳ)² (x-x̅)(y-ȳ)
2005 513 25.00 336236.57 2899.30
2006 635.7 16.00 208994.43 1828.64
2007 836.5 9.00 65719.98 769.08
2008 869.75 4.00 49777.67 446.22
2009 1087.5 1.00 28.72 5.36
2010 1420.25 0.00 107184.81 0.00
2011 1531 1.00 191967.46 438.14
2012 1664 4.00 326201.94 1142.28
2013 1204.5 9.00 12463.69 334.92
2014 1199.25 16.00 11319.03 425.56
2015 1060 25.00 1079.72 -164.30
ΣX ΣY Σ(x-x̅)² Σ(y-ȳ)² Σ(x-x̅)(y-ȳ)
total sum 22110 12021.45 110 1310974.0 8125.20
mean 2010.00 1092.86 SSxx SSyy SSxy

sample size ,   n =   11          
here, x̅ = Σx / n=   2010.00   ,     ȳ = Σy/n =   1092.86  
                  
SSxx =    Σ(x-x̅)² =    110.0000          
SSxy=   Σ(x-x̅)(y-ȳ) =   8125.2          
                  
estimated slope , ß1 = SSxy/SSxx =   8125.2   /   110.000   =   73.8655
                  
intercept,   ß0 = y̅-ß1* x̄ =   -147376.7045          
                  
so, regression line is   Ŷ =   -147376.7045   +   73.8655   *x
................

R² =    (Sxy)²/(Sx.Sy) =    0.4578
..................

Predicted Y at X=   2020   is                  
Ŷ =   -147376.7045   +   73.865455   *   2020   =   1831.514
.................

demand forcast forecast error=demand value-forecast value absolute forecast error squared forcast error Abs %error
Dt Ft et=Dt-Ft | et | (et)² | et/Dt |
513 723.5318 -210.53 210.53 44323.65 41.04%
635.7 797.397 -161.70 161.70 26146.01 25.44%
836.5 871.263 -34.76 34.76 1208.45 4.16%
869.75 945.128 -75.38 75.38 5681.87 8.67%
1087.5 1018.994 68.51 68.51 4693.12 6.30%
1420.25 1092.859 327.39 327.39 107184.81 23.05%
1531 1166.725 364.28 364.28 132696.61 23.79%
1664 1240.590 423.41 423.41 179276.03 25.45%
1204.5 1314.455 -109.96 109.96 12090.20 9.13%
1199.25 1388.321 -189.07 189.07 35747.81 15.77%
1060 1462.186 -402.19 402.19 161753.87 37.94%
forecast error=demand value-forecast value absolute forecast error squared forcast error Abs %error
et=Dt-Ft | et | (et)² | et/Dt |
total sum= 0.00 2367.17 710802.418 220.72%
n= 11 11 11 11
average= 0.00 215.20 64618.40 20.07%

MAD/MAE=   Σ |et|/n =    215.20
      
  
MAPE=   Σ | et/Dt |/n =    20.07%

....................


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