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Question
Table 8.1
The management of an insurance company monitors the number of mistakes made by telephone service representatives for a company they have subcontracted with. The number of mistakes for the past several months appears in this table along with forecasts for errors made with three different forecasting techniques. The column labeled Exponential was created using exponential smoothing with an alpha of 0.30. The column labeled MA is forecast using a moving average of three periods. The column labeled WMA uses a 3-month weighted moving average with weights of 0.65, 0.25, and 0.10 for the most-to-least recent months.
| Month | Mistakes | Exponential | MA | WMA |
| 1 | 55 | |||
| 2 | 61 | |||
| 3 | 71 | |||
| 4 | 77 | 71 | 62 | 67 |
| 5 | 88 | 73 | 70 | 74 |
| 6 | 100 | 77 | 79 | 84 |
| 7 | 109 | 84 | 88 | 95 |
| 8 | 122 | 92 | 99 | 105 |
| 9 | 126 | 101 | 110 | 117 |
| 10 | 126 | 108 | 119 | 123 |
Using Table 8.1, what is the mean absolute percent error for months 6-10 using the exponential smoothing forecasts?
A) less than 22%
B) greater than or equal to 22% but less than 24%
C) greater than or equal to 24% but less than 26%
D) greater than 26%
Answer
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