Question

The monthly sales of a new business software package at a local discount software store were as follows:

Week	1	2	3	4	5	6	7	8	9	10
Sales	480	420	437	450	480	507	470	496	446	476

Find the best number of weeks to use in a moving average forecast based on MSE. Do not round intermediate calculations. Round your answers to two decimal places.

Number of weeks

MSE

2

3

4

The -Select-2-week3-week4-weekItem 5 moving average is a better model.

Find the best single exponential smoothing model by evaluating the MSE from 0.1 to 0.9, in increments of 0.1. Do not round intermediate calculations. Round your answers to two decimal places.

Alpha	MSE
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9

Answer 1

from abve:

actual	2 month	3 month	4 month
A	F1	F1	F1	(A-F1)^2	(A-F2)^2	(A-F3)^2
480
420
437	450.00			169.00
450	428.50	445.67		462.25	18.78
480	443.50	435.67	446.75	1332.25	1965.44	1105.56
507	465.00	455.67	446.75	1764.00	2635.11	3630.06
470	493.50	479.00	468.50	552.25	81.00	2.25
496	488.50	485.67	476.75	56.25	106.78	370.56
446	483.00	491.00	488.25	1369.00	2025.00	1785.06
476	471.00	470.67	479.75	25.00	28.44	14.06
			average	716.25	980.08	1151.26

number of weeks	MSE
2	716.25
3	980.08
4	1151.26

2 week  moving average is a better model.

2)

exponential smoothing model

alpha	MSE
0.1	926.67
0.2	952.26
0.3	978.17
0.4	998.7
0.5	1016.22
0.6	1035.11
0.7	1060.67
0.8	1098.64
0.9	1155.13