BSAD 30 Test 3

mean absolute percentage error (MAPE)

average of absolute values of the percentage forecast errors

mean squared error (MSE)

average of sum of squared forecast errors; total squared error/number of periods

exponential trend line

increasing at increasing rate

negative forecast error

indicates forecasting method overestimated the actual value

positive forecast error

indicates forecasting method underestimated actual value

Calculate slack

LS - ES LF - EF

forecast error

actual value - forecast

cyclical pattern

exists if time series plot shows alternating sequence of points below and above trend line lasting more than one year

horizontal pattern

exists when data fluctuate around constant mean

slack

length of time an activity can be delayed without delaying the entire project

asymptotic trend line

line increasing at decreasing rate

mean absolute error (MAE)

mean of absolute values of forecast errors

mean error

not very useful; simple measure of forecast accuracy

seasonal patterns

recognized by seeing same repeating pattern of highs and lows over successive periods of time within one year ex. chocolate sales in Feb.

weighted moving averages

selecting different weight for the k most recent data values in the time series and computing a weighted average of values; sum must equal 1

trend pattern

time series may show gradual shifts or movements to relatively higher/lower values over longer period of time; linear or non linear

moving averages method

uses average of most recent k data values in time series; each observation receives same weight

exponential smothing

uses weighted average of past time series values as the forecast; special case of weighted moving averages method