Question

Month 1 2 3 4 5 6 7 Value 22 13 18 12 18 23 14...

 Month 1 2 3 4 5 6 7 Value 22 13 18 12 18 23 14

Consider the time series data

b. Develop the three-month moving average forecasts for this time series. Compute MSE and a forecast for month 8 (to 2 decimals if necessary). Enter negative values as negative number.

 Month Time Series Value Forecast Forecast Error Squared Forecast Error Totals
 MSE The forecast for month 8

c. Use a=.2 to compute the exponential smoothing forecasts for the time series. Compute MSE and a forecast for month 8 (to 2 decimals). Enter negative values as negative number.

 Month Time Series Value Forecast Forecast Error Squared Forecast Error Totals
 MSE The forecast for month 8

d. Compare the three-month moving average approach with the exponential smoothing approach using a=.2 . Which appears to provide more accurate forecasts based on MSE?

e. Use a smoothing constant of a=.4 to compute the MSE. (to 2 decimals).

Does a smoothing constant of .4 or .2 appear to provide more accurate forecasts based on MSE?

b)

 month value forecast error error^2 1 22 2 13 3 18 4 12 17.67 -5.67 32.11 5 18 14.33 3.67 13.44 6 23 16.00 7.00 49.00 7 14 17.67 -3.67 13.44 total 108.00

MSE =27.00

forecast =18.33

c)

 month value forecast error error^2 1 22 2 13 22.00 -9.00 81.00 3 18 20.20 -2.20 4.84 4 12 19.76 -7.76 60.22 5 18 18.21 -0.21 0.04 6 23 18.17 4.83 23.36 7 14 19.13 -5.13 26.35 18.11 total 195.81

MSE =32.64

forecast =18.10

d)

 The three-month moving average provides a better forecast since it has a smaller MSE

e)

MSE=32.08

0.4 is better

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