Question

1.Please use the Hawkins sheet.

What is the MFE  , MAE  , MSE  , and MAPE  for a three-month moving average forecast?  Round to two decimal places.

2.Please use the Hawkins sheet.

What is the MFE  , MAE  , MSE  , and MAPE  for the exponential smoothing forecast with alpha = 0.2? Round to two decimal places.

3.Please use the Hawkins sheet.

Based on the MSE values found in Questions 1 & 2, which forecast is best?

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Thank you very much!!

Monthy Proportion of On Tme Payments 80 82 84 83 83 84 85 84 82 83 84 Exponential Smoothing Forecast (alpha-0.2) Forecast Error Absolute Value of Forecast E Squared Forecast Error Percentage Error Absolute Value of Percentage Error Total MFE MAE MSE MAPE

Answer 1

	3-month moving average forecast	forecast error	absolute value of forecast error	squared forecast error	percentage error	absolute value of percentage error
80
82
84
83	82	1	1	1	1.204819277	1.204819277
83	83	0	0	0	0	0
84	83.33333333	0.666666667	0.666666667	0.444444444	0.793650794	0.793650794
85	83.33333333	1.666666667	1.666666667	2.777777778	1.960784314	1.960784314
84	84	0	0	0	0	0
82	84.33333333	-2.33333333	2.333333333	5.444444443	-2.845528455	2.845528455
83	83.66666667	-0.66666667	0.666666667	0.444444445	-0.803212851	0.803212852
84	83	1	1	1	1.19047619	1.19047619
83	83	0	0	0	0	0
	83.33333333
sum		1.333333333	7.333333333	11.11111111	1.500989268	8.798471882
	MFE = 1.333333333/9 =0.148
	MAE = 7.333333333/9 = 0.815
	MSE = 11.11111111/9 = 1.235
	MAPE = 8.798471882/9 = 0.97761

	Exponential smoothing forecast (alpha = 0.2)	forecast error	the absolute value of forecast error	squared forecast error	percentage error	absolute value of percentage error
80	80
82	80	2	2	4	2.43902439	2.43902439
84	80.4	3.6	3.6	12.96	4.285714286	4.285714286
83	81.12	1.88	1.88	3.5344	2.265060241	2.265060241
83	81.496	1.504	1.504	2.262016	1.812048193	1.812048193
84	81.7968	2.2032	2.2032	4.85409024	2.622857143	2.622857143
85	82.23744	2.76256	2.76256	7.631737754	3.250070588	3.250070588
84	82.789952	1.210048	1.210048	1.464216162	1.440533333	1.440533333
82	83.0319616	-1.0319616	1.0319616	1.064944744	-1.258489756	1.258489756
83	82.82556928	0.17443072	0.17443072	0.030426076	0.210157494	0.210157494
84	82.86045542	1.139544576	1.139544576	1.298561841	1.356600686	1.356600686
83	83.08836434	-0.08836434	0.08836434	0.007808257	-0.106463059	0.10646306
	83.07069147
sum		15.35345736	17.59410924	39.10820107	18.31711354	21.04701917
	MFE = 15.35345736/11 = 1.3958
	MAE = 17.59410924/11 = 1.59946
	MSE = 39.10820107/11 = 3.555291
	MAPE = 21.04701917/11 = 1.913365

3 - month moving average is best. because of less MSE