... the result from the revised forecast more accurate than that of the first forecast? Identify the appropriate model: as the mean difference is required and samples are small and not independent, we choose paired t-test. Difference could be in either way; therefore, it is a two-tailed test. Formulate the Null hypothesis and the Alternative hypothesis (H0 and H1): H0: µ1>µ2 H1: µ1?µ2 The level of significance is ? = 5%, then ?/2 = 2.5%. With degrees of freedom,?=23,from Statistical Table, 5, tcrit = 2.069. tcalc = = -2.77, with =191.58, =338.59 tcalc> tcrit Reject H0. In other words, the result of revised forecast is more accurate than that of the first forecast. t-Test: Paired Two Sample for Means Variable 1 Variable 2 Mean -842.3333333 -650.75 Variance 227542.7536 323320.3 Observations 24 24 Pearson Correlation 0.804134873 Hypothesized Mean Difference 0 df 23 t Stat -2.771992028 P(T<=t) one-tail 0.00542241 t Critical one-tail 2.068657599 P(T<=t) two-tail 0.010844821 t Critical two-tail 2.397875057 (ii) The forecasting method assumes that the errors are normally distributed. Does the data support this assumption for each of ...

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