Question

Using the data below, calculate the bias based on using the naive forecast method. Week Time Series Value 6.00 21.00 6.00 15.00 Submit Answer format: Number: Round to: 1 decimal places. Using the data below, what is the value of RMSE? Week Time Series Value Forecast 8.00 2.00 8.00 5.00 Submit Answer format: Number: Round to: 2 decimal places.

Answer 1

#6

For naïve forecasts, we simply set all forecasts to be the value of the last observation.

That is,^yT+h|T=yT.

Bias is calculated as =  

Forecast – Actual Forecast + Actual

Week	Time Series Value	Naive Forecast	Bias
1	6
2	21	6	-0.556
3	6	21	0.556
4	15	6	-0.429
Overall Bias			-0.429

#7

Root Mean Square Error (RMSE) measures how much error there is between two data sets. In other words, it compares a predicted value and an observed or known value.

RMSE= /39 (P.-0,

Where P_i = Predicted Value

O_i = Observed Value

n = Number of observations

Week	Time Series Value (Oi)	Forecast (Pi)	(Pi-Oi)2
1	3	8	25
2	5	2	9
3	2	8	36
4	8	5	9
			79

RMSE = $\sqrt{\frac{79}{4}}$ = 4.4444