Question

Use a four-period moving average to calculate MFE, MAE, MSE, and MAPE.

Historical records show

5346, 7812, 6513, 5783, 5982, 6519, 6283, 5577, 6712, 7345

Answer 1

To calculate MFE, MAE, MSE, and MAPE using a four-period moving average, calculate the moving averages of the given values and then calculate the corresponding forecast errors. Finally, calculate the average of each of these error metrics.

Step-by-step explanation:

To calculate the Mean Forecast Error (MFE), Mean Absolute Error (MAE), Mean Squared Error (MSE), and Mean Absolute Percentage Error (MAPE) using a four-period moving average, follow these steps:

1. Calculate the moving averages by taking the average of each set of four consecutive values: 5346, 7812, 6513, 5783, 5982, 6519, 6283, 5577, 6712, 7345.
2. Calculate the forecast error for each period by subtracting the actual value from the corresponding moving average.
3. Calculate the Mean Forecast Error (MFE) by taking the average of the forecast errors.
4. Calculate the Mean Absolute Error (MAE) by taking the average of the absolute values of the forecast errors.
5. Calculate the Mean Squared Error (MSE) by taking the average of the squared forecast errors.
6. Calculate the Mean Absolute Percentage Error (MAPE) by taking the average of the absolute values of the percentage errors, where the percentage error is the forecast error divided by the actual value, multiplied by 100.

By following these steps, you can calculate the MFE, MAE, MSE, and MAPE using a four-period moving average.