Question

Answer Question 6 (1 point) The Absolute percent error for period 4 when Three period moving average forecast method is used:(Please round to 2 decimal places for your answer and keep in decimal format) 3-Period MA X(Period) y Sales) Forecast Error 1 8.0 2 7.0 3 2.8 4 13 5 15 6 12 Absolute Absolute Percent Squared Error Error Error + Your Answer: Answer

Answer 1

6) Three month moving average forecast for period 4 = Average of previous 3 periods

= (8 + 7 + 2.8) / 3 = 17.8 / 3 = 5.933

Actual value for period 4 = 13

=> Absolute error = 13 - 5.933 = 7.0667

Hence, absolute percent error = 7.0667 / 13 x 100 = 54.358% $\approx$ 54.36%

13) Expected value is calculated as $\sum P_iX_i$ where P denotes probability of event X.

For DA 1: Expected value = (0.4 x 5.21) + (0.6 x -3.22) = 0.152

For DA 2: Expected value = (0.4 x -5.40) + (0.6 x 11.40) = 4.68

For DA 3: Expected value = (0.4 x 9.60) + (0.6 x 3.75) = 6.09

For DA 4: Expected value = (0.4 x 4.06) + (0.6 x 6.33) = 5.422

Since, maximum expected value is 6.09, under EVUPI this is the expected value.

Hence, expected value under EVUPI is 6.09

14) Under the naive approach, the actual value for a period is taken as the forecast for next period.

=> Forecast for period 3 = Actual value of period 2 = 11.5

Actual value of period 3 = 4.6

Hence, absolute forecast error = |4.6 - 11.5| = |-6.9| = 6.9

23) Total sales = 21 + 18 + 25 + 20 = 84

Pizza sales = 18

=> Probability of pizza sales = 18/84 = 0.2143 $\approx$ 0.21