Question

1. Daily high temperatures in St. Louis for the last week were as follows: 33, 33, 38, 36, 43, 23, 28 (yesterday).
   1. Forecast the high temperature today, using a 3-day moving average.
   2. Forecast the high temperature today, using a 2-day moving average.

For questions c-e use all the days where a 3-day forecast value is possible.

3. Calculate the mean absolute deviation based on a 3-day moving average.
4. Compute the mean squared error for the 3-day moving average.
5. Calculate the mean absolute percent error for the 3-day moving averag

Answer 1

Forecast = Sigma(Demand in previous N periods) / N

1. 2PMA

FORECAST 8 = (23 + 28) / 2 = 25.5

2. 3PMA

FORECAST 8 = (43 + 23 + 28) / 3 = 31.33

MAD, MSE, AND MAPE

MAD = SIGMA(SUM OF ABSOLUTE DEVIATIONS) / N

MSE = SIGMA(SUM OF DEVIATIONS) ^ 2 / N

MAPE = SIGMA(SUM OF ABS DEV / DEMAND * 100) / N

PERIOD	ACTUAL DEMAND	FORECAST	DEVIATIONS	ABSOLUTE DEVIATION	ABS DEV / DEMAND	DEVIATIONS^2
1	33
2	33
3	38
4	36	34.67	36 - 34.67 = 1.33	1.33	0.036944	1.7689
5	43	35.67	43 - 35.67 = 7.33	7.33	0.170465	53.7289
6	23	39	23 - 39 = -16	16	0.695652	256
7	28	34	28 - 34 = -6	6	0.214286	36
SIGMA			-13.34	30.66	1.117347	347.4978

N = 4

MAD = 30.66 / 4 = 7.67

MSE = 347.4978 / 4 = 86.87455 OR 86.88

MAPE = (1.117347 * 100) / 4 = 27.93(rounded)

**PLEASE RATE WITH A THUMBS UP :)