The Table below contains actual yearly sales for a company along with the predictions of yearly sales generated using two different forecasting methods.
Year
Actual Sales (in millions)
Method A Predicted Sales
Method B Predicted Sales
2015
8.00
9.0
9.5
2016
12.0
11.5
10.5
2017
14.0
14.0
12.0
2018
16.0
16.5
13.0
2019
10.0
19.0
15.0
2.1
Calculate the mean absolute deviation (MAD) for both forecasting methods. (9)
2.2
Calculate the mean squared error (MSE) for both forecasting methods. (9)
2.3
Calculate the Root mean squared error for both forecasting methods. (6)
2.4
Explain why these measures of accuracy yield different results in this case. (4)
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