Question

3. Chapter 3: Using the table below, calculate the following: MAD, MSE, MAPE. What do you conclude?

Period	Demand	Predicted
1	129	124
2	194	200
3	156	150
4	91	94
5	85	80
6	132	140
7	126	128

Answer 1

Question: Using the table below, calculate the following: MAD, MSE, MAPE. What do you conclude?

Answer:

Overall calculation:

Excel formulas:

Formulas:

Mean Absolute Deviation (MAD) is given by:

MAD = |Error| / n

Here: |Error| = |Demand - Predicted|

Mean Squared Error (MSE) is given by:

MSE = Error^2 / n

Here: Error^2 = (Demand - Predicted)^2

Mean Absolute Percent Error (MAPE) is given by:

MAPE = Error % / n

Here: Error % = (|Error| / Demand) x 100

Conclusion: The MAD and MAPE is lowest and bit closest to the actual demand, MSE is not under the threshold. Here MAD = 5, MAPE = 3.95 which dipicts accurate forecasting and MSE = 28.43. The smaller the error the good and accurate the forecasting is.