The following table represents sales data for milk (in hundred liters) sold by a grocery. Do the computations to fill out the table and answer the following questions: 1. Using MAD as the criterion, which of the following models would you use for the given time series data? Why? A. Naïve approach; B. 5-month SMA model;
The following table represents sales data for milk (in hundred liters) sold by a grocery.
Do the computations to fill out the table and answer the following questions:
1. Using MAD as the criterion, which of the following models would you use for the
given time series data? Why?
A. Naïve approach;
B. 5-month SMA model;
C. WMA model with weights 0.1, 0.3, and 0.6; or
D. ES model with α = 0.5 and a forecast of 3,500 liters in the first month.
NOTE: In answering Item 1, mention the whole description of the model; i.e., not just
“SMA model”, but “SMA model with n = ...”; not just “WMA model”, but “WMA model
with weights ...”; not just “ES model”, but “ES model with α = ...”.
2. Interpret the MAD of the most accurate among the
3. Based on your decision in Item 1, what should be the forecast for Month 11?
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