Problem:
An analyst must decide between two different forecasting techniques for weekly sales of roller blades: a linear trend equation and the naive approach. The linear trend equation is Ft = 127 + 1.8t, and it was developed using data from periods 1 through 10.
Required:
Question 1) Based on data for periods 11 through 20 as shown in the table, which of these two methods has the greater accuracy if MAD and MSE are used?
| t |
Units Sold |
| 11 |
147 |
| 12 |
149 |
| 13 |
151 |
| 14 |
142 |
| 15 |
154 |
| 16 |
151 |
| 17 |
154 |
| 18 |
155 |
| 19 |
161 |
| 20 |
163 |
Solve the given numerical problem and illustrate step by step calculation.