In: Statistics and Probability
Considering the following time series data: (Tableau)
Determine the least squares trend equation. Use a linear equation and any other non- linear equation. Provide R-squared for both cases.
Estimate the price of gold (ounce) for 2020. Does this seem like a reasonable estimate based on historical data?
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.
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%
....................
THANKS
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