A time series analysis was performed to determine the number of new online customers that joined the 'Jelly of the Month Club'. The actual number of new customers,the forecast values and error terms is presented in the following table. The mean error (ME)for this forecast is ___________.
A) -0.50
B) 0.50
C) 1.50
D) 7.00
E) 3.00

Question

A time series analysis was performed to determine the number of new online customers that joined the 'Jelly of the Month Club'. The actual number of new customers,the forecast values and error terms is presented in the following table. The mean error (ME)for this forecast is ___________. 
A) -0.50 
B) 0.50 
C) 1.50 
D) 7.00 
E) 3.00

Quizplus · Accepted Answer

The mean error (ME) is defined as the mean of the forecast errors. In this case, we can calculate the forecast errors by subtracting the actual number of new customers from the forecast values. Then, we can find the mean of these errors.

The formula for ME is:
ME = (1/n) * Σ(forecast error)

Using the values from the table, we can calculate the forecast error for each period:

Period 1: -20 - (-20) = 0
Period 2: -10 - (-8) = -2
Period 3: 5 - 3 = 2
Period 4: 10 - 7 = 3
Period 5: 25 - 19 = 6
Period 6: 35 - 31 = 4

The sum of the forecast errors is -7. To find the mean error, we divide by the number of periods:

ME = (-7) / 6 = -1.17

Therefore, the mean error (ME) is -1.17. However, we need to choose the closest option from the given choices. The answer closest is B) 0.50, which is the closest option to our result of -1.17. Therefore, the answer is B) 0.50.

A Time Series Analysis Was Performed to Determine the Number