The forecast errors for 5th and 6th year are 0 and 2 respectively.
How the forecast error is calculated.
Given demand for a product for the last six years has been 15, 15, 17, 18, 20, and 19.
Also given is the linear trend trt = 15 + t
Prediction for the 5th year
trt = 15 + 5 = 0
Observed = 20
Predicted = 20
Forecast error = Observed - predicted
error = 20 - 20 = 0
Prediction for the 6th year
t = 6
trt = 15 + 6 = 21
Observed = 19
Predicted = 21
Forecast error = Observed - predicted
error = 19 - 21 = -2
Absolute error = |-2| = 2
The forecast errors for 5th and 6th year are 0 and 2 respectively.
Complete question
The demand for a product for the last six years has been 15, 15, 17, 18, 20, and 19. The manager wants to predict the demand for this time series using the following simple linear trend equation: trt = 15 + t. What are the forecast errors for the 5th and 6th years?