Three models are tested on the same demand observations.

A supply chain manager wants to minimize the influence of occasional unusually large forecasting errors. Which recommendation is most justified by these results?

Question

Three models are tested on the same demand observations. 
   
 A supply chain manager wants to minimize the influence of occasional unusually large forecasting errors. Which recommendation is most justified by these results?

Accepted Answer

Choose Holt-Winters because it has the lowest RMSE.

Answer

Choose Holt because its RMSE is highest and therefore captures more variation

Answer

Choose Holt because it has the lowest MAE.

Answer

Choose SES because its MAE and RMSE are closest together.

Model	Test MAE	Test RMSE
SES	18	20
Holt	15	28
Holt-Winters	17	19

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Three models are tested on the same demand observations. A supply chain ma...

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