Question

Consider the following time series data:

Week             1                   2                 3                4                 5                     6

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Value            18                 13            16               11              17                   14

Using the naïve method (most recent value) as the forecast for the next week, compute the following measures of forecast accuracy.

A. mean absolute error

B. mean squared error

C. mean absolute percentage error

d. What is the forecast for Week 7?

Answer 1

The naïve method of forecasting uses the value of previous week as the current weeks forecast. Thus, the forecast value of the given weeks can be calculated as shown below:

Determine the value of errors as shown below:

From the above calculations, the answer to the given question are:

a. mean absolute error = 4.40

b. mean squared error = 20.80

c. mean absolute percentage error = 31.88

d. forecast for week 7 = 14