Question

Question 1 (30 points) Table 1 contains the predicted and actual per capita income for a certain area of the United States Table 1: Quarterly Energy Bills for the School System (x$100) ear 1979 1980 1981 1982 1983 1984 1985 1986 Per Capita Income (S) 3074 3135 3206 3267 3310 3362 3418 3500 Predicted Per Capita Income (S 3292 3250 3230 3255 3266 3283 3300 3337 a.) Calculate the forecast error for each year b.) Plot these forecast errors against time c.) Do you think the forecasting method that was used adequately fits the data pattern present? Why or why not? d.) Calculate the mean absolute deviation (MAD) e.) Calculate the mean squared error (MSE). .) Calculate the mean absolute percentage errons (MAPE)

Answer 1

1 Forecast error of each year is equal to the difference between per capita income and predicted per capita income. Time Per Capita Income Predicted Per capita Income Ans.1 Forecast Error of each Year 3074 3135 3206 3267 3310 3362 3418 3510 218 1979 1980 1981 1982 1983 1984 1985 1986 3292 3250 3230 3255 3266 3283 3300 3337 115 12 79 118 173 10 2 Ans.2 Forecast Error of each Year vs. Time 13 14 15 16 17 200 100 100 19 20 21 200 300 1980 1982 1984 198 23

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