Problem 15-07 (Algorithmic) Refer to the gasoline sales time series data in the
ID: 465813 • Letter: P
Question
Problem 15-07 (Algorithmic)
Refer to the gasoline sales time series data in the given table.
A) Compute four-week and five-week moving averages for the time series. Round your answers to two decimal places.
B) 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 = ?
(please fill in all question marks)
Week Sales (1000s of gallons) 1 18 2 20 3 19 4 24 5 17 6 16 7 22 8 19 9 22 10 20 11 14 12 23Explanation / Answer
4 week moving average will be the average of the sales of the last four weeks. For instance the 4 week moving average for week 5 will be = average of sales of weeks 1 to 4 = (18+20+19+24)/4 = 20.25
5 week moving average is calculated using the data of last five weeks.
B. MSE = mean squared error = sum of the square of errors/n
where error = actual sales - moving average
MSE for 4 week moving average = 112.0625/8 = 14.01
MSE for 5 week moving average:
MSE for 5 week moving average = 74.16/7 = 10.59
Week Sales (1000s of gallons) 4 week moving average 5 week moving average 1 18 2 20 3 19 4 24 5 17 20.25 6 16 20.00 19.60 7 22 19.00 19.20 8 19 19.75 19.60 9 22 18.50 19.60 10 20 19.75 19.20 11 14 20.75 19.80 12 23 18.75 19.40