Following are two weekly forecasts made by two different methods for the number of gallons of gasoline, in thousands, demanded at a local gasoline station. Also shown are actual demand levels, in
thousands of gallons:
Forecast
Method 1
Actual
Demand
Actual
Demand
Week
Forecast
Method 2
0.82
Week
1
0.90
0.72
1
0.72
2
1.02
1.00
2
1.19
1.00
3
0.92
1.00
3
0.92
-1.00
4
1.17
1.00
4
1.17
1.00
The MAD for Method 1 = thousand gallons (round your response to three decimal places).

MAD( Mean Absolute Deviation) and MSE( Mean Squared Error) are the most commonly used forecast error measures. MAD is the average of the absolute errors and MSE is the average of the squared errors.

Solution:- Method 1 Week Method 1 Actual E E^2

1 0.9 0.7 0.2 0.04

2 1.05 1 0.05 0.0025

3 0.95 1 0.05 0.0025

4 1.2 1 0.2 0.04

0.5 0.085

MAD = sum of error/n

= 0.5/4

=0.125

MSE = sum of squared error/n

= 0.0.85/4

= 0.02125

Method 2 Week Method 2 Actual E E^2

1 0.8 0.7 0.1 0.01

2 1.2 1 0.2 0.04

3 0.9 1 0.1 0.01

4 1.11 1 0.11 0.0121

0.51 0.0721

Hence, MAD = 0.51/4 = 0.1275 and MSE = 0.0721/4 = 0.018.

Learn more about the MAD and MSE here:-

https://brainly.com/question/14688363

#SPJ1