Question

# Month 1 2 3 4 5 6 7 Value 24 15 21 13 19 21 16...

 Month 1 2 3 4 5 6 7 Value 24 15 21 13 19 21 16

a) Develop a three-month moving average for this time series. Compute MSE and a forecast for month 8. If required, round your answers to two decimal places. Do not round intermediate calculation. MSE:_______ The forecast for month 8________

b) Use α = 0.2 to compute the exponential smoothing values for the time series. Compute MSE and a forecast for month 8. If required, round your answers to two decimal places. Do not round intermediate calculation. MSE_____ The forecast for month 8 _____

c) Use trial and error to find a value of the exponential smoothing coefficient α that results in the smallest MSE. If required, round your answer to two decimal places. α =______

#### Homework Answers

Answer #1

a)

 month value forecast |error| error^2 1 24 2 15 3 21 4 13 20.00 -7.00 49.00 5 19 16.33 2.67 7.11 6 21 17.67 3.33 11.11 7 16 17.67 -1.67 2.78 total 70.00 average 17.50 MSE= 17.50 Forecast= 18.67

b)

 month value forecast error error^2 1 24 2 15 24.00 -9.00 81.00 3 21 22.20 -1.20 1.44 4 13 21.96 -8.96 80.28 5 19 20.17 -1.17 1.36 6 21 19.93 1.07 1.14 7 16 20.15 -4.15 17.20 total 182.42 average 30.40 MSE= 30.40 Forecast= 19.32

c()

from   trial and error : α =0.41

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