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σ 𝐴𝑐𝑡𝑢𝑎𝑙 − 𝐹𝑜𝑟𝑒𝑐𝑎𝑠𝑡
𝑀𝐴𝐷 =
𝑛
Quarter 1 2 3 4 5 6 7 8 9
Demand 180 168 159 175 190 205 180 182
Mean Squared Error
𝑎 = 𝑦ത − 𝑏𝑥ҧ
Seasonal Variations in Data
If we expected the 2010 annual demand to be 1200 units.
Associative Forecasting Method:
Regression Analysis
Linear Regression Analysis: A straight-line mathematical
model to describe the functional relationship between
independent and dependent variables.
𝑦ො = 𝑎 + 𝑏𝑥