Question

(b) Develop the three-week moving average forecasts for this time series. (Round your answers to two...

(b)

Develop the three-week moving average forecasts for this time series. (Round your answers to two decimal places.)

Week Time Series
Value
Forecast
1 16
2 11
3 13
4 10
5 14
6 12

Compute MSE. (Round your answer to two decimal places.)

MSE =

What is the forecast for week 7?

(c)

Use α = 0.2 to compute the exponential smoothing forecasts for the time series.

Week Time Series
Value
Forecast
1 16
2 11
3 13
4 10
5 14
6 12

Compute MSE. (Round your answer to two decimal places.)

MSE =

What is the forecast for week 7? (Round your answer to two decimal places.)

(d)

Compare the three-week moving average approach with the exponential smoothing approach using

α = 0.2.

Which appears to provide more accurate forecasts based on MSE? Explain.

The three-week moving average provides a better forecast since it has a smaller MSE than the smoothing approach.The exponential smoothing using α = 0.2 provides a better forecast since it has a larger MSE than the three-week moving average approach.      The three-week moving average provides a better forecast since it has a larger MSE than the smoothing approach.The exponential smoothing using α = 0.2 provides a better forecast since it has a smaller MSE than the three-week moving average approach.

(e)

Use a smoothing constant of α = 0.4 to compute the exponential smoothing forecasts.

Week Time Series
Value
Forecast
1 16
2 11
3 13
4 10
5 14
6 12

Does a smoothing constant of 0.2 or 0.4 appear to provide more accurate forecasts based on MSE? Explain.

The exponential smoothing using α = 0.2 provides a better forecast since it has a larger MSE than the exponential smoothing using α = 0.4.The exponential smoothing using α = 0.2 provides a better forecast since it has a smaller MSE than the exponential smoothing using α = 0.4.      The exponential smoothing using α = 0.4 provides a better forecast since it has a larger MSE than the exponential smoothing using α = 0.2.The exponential smoothing using α = 0.4 provides a better forecast since it has a smaller MSE than the exponential smoothing using α = 0.2.

Homework Answers

Answer #1

b)

3 week
Time period Actual Value(A) Moving avg. Forecast(F)
1 16
2 11
3 13
4 10 13.33
5 14 11.33
6 12 12.33

MSE = 6.11

forecast for week 7 =12

c)

Time period Actual Value(A) Forecast(F)
1 16
2 11 16.00
3 13 15.00
4 10 14.60
5 14 13.68
6 12 13.74

MSE = 10.66

forecast for week 7 =13.40

d)

The three-week moving average provides a better forecast since it has a smaller MSE than the smoothing approach

e)

Time period Actual Value(A) Forecast(F)
1 16
2 11 16.00
3 13 14.00
4 10 13.60
5 14 12.16
6 12 12.90

The exponential smoothing using α = 0.4 provides a better forecast since it has a smaller MSE than the exponential smoothing using α = 0.2.

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