Question

During the past five hours, the Port of Long Beach in California unloaded large quantities of...

During the past five hours, the Port of Long Beach in California unloaded large quantities of grain from ships and relevant data are summarized in the table below:

Hour Quantity unloaded (tons)

--------------------------------------------

1 3,406

2 3,440

3 3,298

4 3,372

5 3,436

--------------------------------------------

1) Use the naïve approach to develop a forecast of the tonnage of grain unloaded in each hour up to the 5th hour.

(2) Repeat (1) above by using the 2-hour simple moving average method.

(3) Which of the two forecasting techniques is more accurate based on MAD? Be sure to carry four decimal places for irrational numbers.

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Answer #1

1) Naive Approach

F(2) = 3406

F(3) = 3440

F(4) = 3298

F(5) = 3372

2. 2-hour moving average

F(3) = (3406+3440)/2

= 3423

F(4) = (3440+3298)/2

= 3369

F(5) = (3298+3372)/2

= 3335

3. MAD for Naive

MAD = (34 + 142 + 74 + 64)/4

= 78.5

MAD for Moving Average

MAD = (125 + 3 + 101)/3

= 76.3333

Hence the 2 - hour simple.moving average is more accurate

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