Question

# I need the answer for (e) : Use trial and error to find a value of...

I need the answer for (e) : Use trial and error to find a value of the exponential smoothing coefficient α that results in a smaller MSE than what you calculated for α = 0.20. Use a two-decimal digit precision.

Consider the following time series data.

 Week 1 2 3 4 5 6 Value 18 15 15 13 17 14
(b) Develop a three-week moving average for this time series. Compute MSE and a forecast for week 7.
If required, round your answers to two decimal places.
 Week Value Forecast 1 18 2 15 3 15 4 13 16.00 5 17 14.33 6 14 15.00
MSE: 5.70
The forecast for week 7: 14.67
c) Use α = 0.2 to compute the exponential smoothing values for the time series. Compute MSE and a forecast for week 7.
If required, round your answers to two decimal places.
 Week Value Forecast 1 18 2 15 18.00 3 15 17.40 4 13 16.92 5 17 16.14 6 14 16.31
MSE: 7.24
The forecast for week 7:  15.85
(d) Compare the three-week moving average forecast with the exponential smoothing forecast using α = 0.2. Which appears to provide the better forecast based on MSE?
- Select your answer -Three-week moving averageExponential SmoothingItem 15
Explain.
The input in the box below will not be graded, but may be reviewed and considered by your instructor.
(e) Use trial and error to find a value of the exponential smoothing coefficient α that results in a smaller MSE than what you calculated for α = 0.20. Use a two-decimal digit precision.
alpha:

Solution:

e)Using trial and error method let us calculate MSE which is smaller.

I have used excel and attached the screenshot below.

From the above table minimum MSE=4.756802 for =0.52

The value of alpha that yields minimum MSE is =0.52

Please give a thumbs up if you are satisfied with the above answer.

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