Consider the following time series data: Question 9: Develop a three month avera

Question

Consider the following time series data:

Question 9: Develop a three month average forecast. Compute MSE and a forecast for month 13.

Question 10: Use = 0.2 to compute the exponential smoothing values for the time series. Compute MSE and a forecast for month 13.

Question 11: Compare the result for the three month average and exponential smoothing. Which appears to provide a better forecast based on MSE? Explain. (Make sure to adjust the MSE of the exponential smoothing).

2 5 6 7 8 10 11 12 Month 1 Value 80 82 84 83 833 84 85 84 82 83 84 E83

Explanation / Answer

9)

Month Value Three Month Moving Average Error Error Squred 1 80 2 82 3 84 4 83 82.00 1.00 1.00 5 83 83.00 0.00 0.00 6 84 83.33 0.67 0.44 7 85 83.33 1.67 2.78 8 84 84.00 0.00 0.00 9 82 84.33 -2.33 5.44 10 83 83.67 -0.67 0.44 11 84 83.00 1.00 1.00 12 83 83.00 0.00 0.00 13 83.33 Sum 11.11 MSE 1.234567901

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