Problem 15-07 (Algorithmic) Refer to the gasoline sales time series data in the
ID: 369598 • Letter: P
Question
Problem 15-07 (Algorithmic)
Refer to the gasoline sales time series data in the given table.
Compute four-week and five-week moving averages for the time series. Round your answers to two decimal places.
Compute the MSE for the four-week and five-week moving average forecasts. Round your intermediate calculations and final answers to two decimal places.
MSE for four-week moving average = __________
MSE for five-week moving average = __________
What appears to be the best number of weeks of past data (three, four, or five) to use in the moving average computation? Recall that MSE for the three-week moving average is 11.98. Three / Four / Five
Explanation / Answer
The four week moving average
Five week moving average,
Since the 5 Year Moving average MSE is the least,
It is best to take 5 years of past data.
Year Actuals 4Y MA Abs Error Sq Error 1 18 2 22 3 19 4 22 5 19 20.25 1.25 1.5625 6 15 20.50 5.50 30.25 7 22 18.75 3.25 10.5625 8 18 19.50 1.50 2.25 9 22 18.50 3.50 12.25 10 19 19.25 0.25 0.0625 11 14 20.25 6.25 39.0625 12 22 18.25 3.75 14.0625 MSE 13.75781