Compute the forecast error for the given problem.
In order to estimate the attendance at an annual tennis tournament a model has been developed which uses attendance from the previous year as well as the amount spent for advertising this year. From the years exposed in the table, forecast the attendance for years 2-5 also calculate the forecast error.
|
Year
|
Attendance
|
Advertising Expenditure
|
Forecast
|
Error
|
|
1
|
8363
|
750
|
|
|
|
2
|
9426
|
1250
|
|
|
|
3
|
9318
|
3200
|
|
|
|
4
|
10206
|
4500
|
|
|
|
5
|
11018
|
5600
|
|
|
The multiple regression model is Attendance = 6738 + .23($) + .25 (Attlag)
Note- 'Attlag' means last-year's actual attendance. Therefore in forecasting the second year's attendance we'd use the first year's actual attendance value and so forth.