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Chain Tails analyst wants to compare the accuracy of two methods that he used to forecast the monthly sales of clutch plate products. His monthly
Chain Tails analyst wants to compare the accuracy of two methods that he used to forecast the monthly sales of clutch plate products. His monthly forecasts against the actual sales from January to April is given below.
He wants to use MAD and MSE (using the table given below) to determine which method provides better forecast accuracy.
\begin{tabular}{|l|l|l|l|} \hline Month & Actual Sales & Method 1 Forecast & Method 2 Forecast \\ \hline January & 50 & 48 & 47 \\ \hline February & 60 & 55 & 56 \\ \hline March & 60 & 62 & 57 \\ \hline April & 40 & 41 & 35 \\ \hline \end{tabular} \begin{tabular}{|l|l|l|l|l|l|l|l|l|l|} \hline & & \multicolumn{5}{|c|}{ Method 1 } & \multicolumn{5}{|c|}{ Method 2 } \\ \hline Month & \begin{tabular}{l} Actual \\ Sales \end{tabular} & \begin{tabular}{l} Method \\ 1 \\ Forecast \end{tabular} & Error & Error| & Error 2 & \begin{tabular}{l} Method \\ 2 \\ Forecast \end{tabular} & Error & Error| & Error 2 \\ \hline January & 50 & 48 & & & & 47 & & & \\ \hline February & 60 & 55 & & & & 56 & & & \\ \hline March & 60 & 62 & & & & 57 & & & \\ \hline April & 40 & 41 & & & & 35 & & & \\ \hline Total & & & & & & & & & \\ \hline \end{tabular}
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