Monthly forecast and demand values for a firm are given below

Month Forecast Demand

Jan
Feb
Mar
Apr
May 100
105
100
100
90 95
90
110
98
110

Mean square error in forecasting of above 5 months is

150.8

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13.04

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12.23

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170.7

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Solution

The correct option is A 150.8

Month Forecast $F_{i}$ Demand $D_{i}$ $D_{i} - F_{i}$

Jan
Feb
Mar
Apr
May 100
105
100
100
90 95
90
110
98
110 -5
-15
10
-2
20

Mean square error $= \frac{\sum (D_{i} - F_{i})^{2}}{n}$

$= \frac{(5^{2} + 15^{2} + 10^{2} + 2^{2} + 20^{2})}{5} = 150.8$

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Month	Forecast	Demand
Jan Feb Mar Apr May	100 105 100 100 90	95 90 110 98 110

Month	Forecast $F_{i}$	Demand $D_{i}$	$D_{i} - F_{i}$
Jan Feb Mar Apr May	100 105 100 100 90	95 90 110 98 110	-5 -15 10 -2 20