Consider the following time series data. Choose the correct time series plot. Pl
ID: 2748162 • Letter: C
Question
Consider the following time series data.
Choose the correct time series plot.
Plot (iv)
What type of pattern exists in the data?
Horizontal Pattern
Develop a three-week moving average for this time series. Compute MSE and a forecast for week 7. Round your answers to two decimal places.
MSE:
The forecast for week 7:
Use = 0.2 to compute the exponential smoothing values for the time series. Compute MSE and a forecast for week 7. Round your answers to two decimal places.
MSE:
The forecast for week 7:
Compare the three-week moving average forecast with the exponential smoothing forecast using = 0.2. Which appears to provide the better forecast based on MSE?
Three-week moving average
Explain.
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Use trial and error to find a value of the exponential smoothing coefficient that results in a smaller MSE than what you calculated for = 0.2. Find a value of for the smallest MSE. Round your answer to three decimal places.
=
Explanation / Answer
3- week moving average
Forecast for week 7 = 15
MSE = 10.78
Exponential Smoothing
Forecast for week 7 = 16
MSE = 9.22
Based on Least MSE, exponential smoothing method is better for forecasting
Using trial and error, we find that alpha value of 0.3 will yield the least MSE.
3- week moving average Exponential Smoothing 0.2 Week Time Series Value Forecast MSE Week Time Series Value Forecast MSE 1 18 1 18 18.0 0.00 2 13 2 13 18.0 25.00 3 16 3 16 17.0 1.00 4 12 15.7 13.44 4 12 16.8 23.04 5 18 13.7 18.78 5 18 15.8 4.67 6 15 15.3 0.11 6 15 16.3 1.62 7 Forecast = 15.0 7 Forecast = 16.0 MSE = 10.78 MSE = 9.22