What are reasonable criteria for selecting one time-series method over another?
What will be an ideal response?
Forecast error measures provide important information for choosing the best forecasting method for a service or product. They also guide managers in selecting the best values for the parameters needed for the method: n for the moving average method, the weights for the weighted moving average method, alpha for the exponential smoothing method, and when regression data begins for the trend projection with regression method. The criteria to use in making forecast method and parameter choices include 1. minimizing bias (CFE); 2. minimizing MAPE, MAD, or MSE; 3 . maximizing r2; 4. meeting managerial expectations of changes in the components of demand; and 5. minimizing the forecast errors in recent periods. The first three criteria relate to statistical measures based on historical performance, the fourth reflects expectations of the future that may not be rooted in the past, and the fifth is a way to use whatever method seems to be working best at the time a forecast must be made.
You might also like to view...
Identify the following activities, performed on a manufactured product, as value-adding (V) or nonvalue-adding (NV). _____
a. Receiving _____ b. Storing raw materials _____ c. Moving materials _____ d. Working on product _____ e. Painting product _____ f. Packing and shipping _____ g. Engineering design of product _____ h. Storing finished goods
Which of the following is NOT a true statement about communication strategy?
A. It is the most visible piece of a public relations program. B. It deals with message delivery channels. C. It makes up the main thrust of a public relations program. D. It supports the organization's action strategy. E. It deals with message content.
Statistical analysis is a simple task and does not require any training
Indicate whether the statement is true or false
The dumping of goods by foreign producers is intended to ______.
a. capture market share quickly b. drive domestic producers out of the market c. quickly increase product price d. influence the elasticity of demand