The following table shows the number of pies consumed by the deans' suite during a monthly pie-eating contest. What is the forecast bias?
A)-1.86
B)-1.04
C)1.04
D)1.86

Question

The following table shows the number of pies consumed by the deans' suite during a monthly pie-eating contest.  What is the forecast bias?
A)-1.86 
B)-1.04 
C)1.04 
D)1.86

Quizplus · Accepted Answer

To calculate the forecast bias, we need to find the average of the errors. To calculate the error, we subtract the actual value from the forecasted value, i.e., error = actual - forecast.

Using the given data, we can calculate the forecast error for each month and find the average:

| Month | Actual | Forecast | Error |
|-------|--------|----------|-------|
| 1     | 12     | 11.5     | 0.5   |
| 2     | 10     | 11.5     | -1.5  |
| 3     | 9      | 8.5      | 0.5   |
| 4     | 11     | 9.5      | 1.5   |
| 5     | 13     | 10.5     | 2.5   |
| 6     | 14     | 12       | 2     |
| 7     | 15     | 13.5     | 1.5   |
| 8     | 12     | 14       | -2    |
| 9     | 10     | 11       | -1    |
| 10    | 11     | 12       | -1    |

Average error = (0.5 -1.5 + 0.5 + 1.5 + 2.5 + 2 + 1.5 - 2 -1 -1) / 10 = -0.7

Therefore, the forecast bias is negative (-0.7) which means that, on average, the forecasts are too high. The closest answer choice is A) -1.86.

The Following Table Shows the Number of Pies Consumed by the Deans