1) 4 year Simple Moving Average forecast year | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 |
Sales | 20 | 21 | 23 | 22 | 25 | 24 | 27 | 26 | 28 | 30 |
Calculate 4 year Simple Moving Average forecast
Solution:
The value of table for x and y
x | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 |
---|
y | 20 | 21 | 23 | 22 | 25 | 24 | 27 | 26 | 28 | 30 |
---|
Calculation of 4 year moving averages of the data
(1) year | (2) Sales | (3) 4 year moving total | (4) 4 year moving average (3)-:4 | (5) 2 item moving total of column (4) | (6) 4 year centered moving average (5)-:2 |
1 | 20 | | | | |
| | | | | |
2 | 21 | | | | |
| | 20+21+23+22=86 | 86-:4=21.5 | | |
3 | 23 | | | 21.5+22.75=44.25 | 44.25-:2=22.125 |
| | 21+23+22+25=91 | 91-:4=22.75 | | |
4 | 22 | | | 22.75+23.5=46.25 | 46.25-:2=23.125 |
| | 23+22+25+24=94 | 94-:4=23.5 | | |
5 | 25 | | | 23.5+24.5=48 | 48-:2=24 |
| | 22+25+24+27=98 | 98-:4=24.5 | | |
6 | 24 | | | 24.5+25.5=50 | 50-:2=25 |
| | 25+24+27+26=102 | 102-:4=25.5 | | |
7 | 27 | | | 25.5+26.25=51.75 | 51.75-:2=25.875 |
| | 24+27+26+28=105 | 105-:4=26.25 | | |
8 | 26 | | | 26.25+27.75=54 | 54-:2=27 |
| | 27+26+28+30=111 | 111-:4=27.75 | | |
9 | 28 | | | | |
| | | | | |
10 | 30 | | | | |
(1) year | (2) Sales | (3) 4 year moving average | (4) Error | (5) |Error| | (6) "Error"^2 | (7) |%"Error"| |
1 | 20 | | | | | |
2 | 21 | | | | | |
3 | 23 | | | | | |
4 | 22 | | | | | |
5 | 25 | 22.125 | 25-22.125=2.875 | 2.875 | 8.2656 | 11.5% |
6 | 24 | 23.125 | 24-23.125=0.875 | 0.875 | 0.7656 | 3.65% |
7 | 27 | 24 | 27-24=3 | 3 | 9 | 11.11% |
8 | 26 | 25 | 26-25=1 | 1 | 1 | 3.85% |
9 | 28 | 25.875 | 28-25.875=2.125 | 2.125 | 4.5156 | 7.59% |
10 | 30 | 27 | 30-27=3 | 3 | 9 | 10% |
11 | | 0 | Total | 12.875 | 32.5469 | 47.69% |
Forecasting errors
1. Mean absolute error (MAE), also called mean absolute deviation (MAD)
MAE=1/n sum |e_i|=12.875/6=2.1458
2. Mean squared error (MSE)
MSE=1/n sum |e_i^2|=32.5469/6=5.4245
3. Root mean squared error (RMSE)
RMSE=sqrt(MSE)=sqrt(5.4245)=2.3291
4. Mean absolute percentage error (MAPE)
MAPE=1/n sum |e_i/y_i|=47.69/6=7.95
This material is intended as a summary. Use your textbook for detail explanation.
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