Question

The number of internal disk drives (in milions) made at a plant in Talwan during the past 5 years follows: Disk Drives 142 156 196 204 216 Year a) Using simple linear regression, the forecast for the number of disk drives to be made next year disk drives (round your response to one decimal place) b) The mean squared error(MSE) when using simple inear c) The mean absolute percentage error (MAPE) when using simple linear regression . regressiondrives (round your response to one decimal place) % round your response to one decimal place

Answer 1

A.

According to the above graph of trend line and regression equation,

No. of disk drives =124 + 19.6*year

The data is of past 5 year, and present year is 6^th year. So, next year is 7^th year.

Forecast of No. of disk drives in year 7 =124 + 19.6*7 = 261.2 or 261

B.

Year	Disk Drives	Regression forecast	Absolute error	Square of absolute error
1	142	143.6	1.6	2.56
2	156	163.2	7.2	51.84
3	196	182.8	13.2	174.24
4	204	202.4	1.6	2.56
5	216	222	6	36
			MSE =	53.44

MSE = mean of the square error = (2.56+51.84+174.24+2.56+36)/5 =  53.44

C.

Year	Disk Drives	Regression forecast	Absolute error	Absolute percentage error (%)
1	142	143.6	1.6	1.13
2	156	163.2	7.2	4.62
3	196	182.8	13.2	6.73
4	204	202.4	1.6	0.78
5	216	222	6	2.78
			MAPE =	3.21

MAPE = Mean of the absolute percentage error = (1.13+4.62+6.73+.78+2.78)/5 =  3.21%