A counseling service records the number of calls to their hotline for the last year. Based on MAD, which of these models does the best job of forecasting? $$\begin{array} { | l | c | }
\hline { \text { Month } } & \text { Demand } \
\hline \text { Tanuary } & 111 \
\hline \text { February } & 127 \
\hline \text { March } & 146 \
\hline \text { April } & 159 \
\hline \text { May } & 165 \
\hline \text { Tune } & 165 \
\hline \text { Tuly } & 178 \
\hline \text { August } & 182 \
\hline \text { September } & 191 \
\hline \text { October } & 208 \
\hline \text { November } & 223 \
\hline \text { December } & 228 \
\hline
\end{array}$$
A)a simple moving average of three periods
B)a simple moving average of five periods
C)a weighted moving average of .7, .2, .1
D)a weighted moving average of .5, .2, .2, .1

Question

A counseling service records the number of calls to their hotline for the last year. Based on MAD, which of these models does the best job of forecasting? $$\begin{array} { | l | c | } 
\hline { \text { Month } } & \text { Demand } \
\hline \text { Tanuary } & 111 \
\hline \text { February } & 127 \
\hline \text { March } & 146 \
\hline \text { April } & 159 \
\hline \text { May } & 165 \
\hline \text { Tune } & 165 \
\hline \text { Tuly } & 178 \
\hline \text { August } & 182 \
\hline \text { September } & 191 \
\hline \text { October } & 208 \
\hline \text { November } & 223 \
\hline \text { December } & 228 \
\hline
\end{array}$$
A)a simple moving average of three periods
B)a simple moving average of five periods
C)a weighted moving average of .7, .2, .1
D)a weighted moving average of .5, .2, .2, .1

Quizplus · Accepted Answer

To determine the best forecasting model using MAD (Mean Absolute Deviation), we calculate the forecast errors for each model and choose the one with the lowest MAD. The question doesn't provide the forecasts made by each model, but generally, a weighted moving average with higher weights on more recent data (like option C) tends to adapt more quickly to trends and thus often results in a lower MAD in trending data, which this dataset exhibits as it consistently increases over time.

A Counseling Service Records the Number of Calls to Their