In a time series forecasting model, the demand for five

Home » Industrial Engineering » Industrial Engineering Miscellaneous » Question

In a time series forecasting model, the demand for five time periods was 10,13,15,18 and 22. A linear regression fit resulted in an equation F = 6.9 + 2.9 where F is the forecast for period f. The sum of absolute deviations for the five data is

1. 2.2
2. 0.2
3. –1.2
4. 24.3

Correct Option: A

F = 6.9 + 2.9 t
F₁ = 6.9 + 2.9 × 1 ⇒ 9.8
F₂ = 6.9 + 2.9 × 2 ⇒ 12.7
F₃ = 6.9 + 2.9 × 3 ⇒ 15.6
F₄ = 6.9 + 2.9 × 4 ⇒ 18.5
F₅ = 6.9 + 2.9 × 5 = 21.4
D₁ = 10 D₂ = 13 0₃ = 15
D₄ = 16 D₅ = 22
SAD = ∑ |e_i|
SAD = |10 − 9.8| + |13 − 12.7| + |15 − 15.6| + |18 − 18.5| + |22 − 21.4 |
Absolute Deviation = 2.2