Consider the following time series data.
Week
1
2
3
4
5
6
Value
17
13
15
11
15
13
(a)
Choose the correct time series plot.
(i)
(ii)
(iii)
(iv)
What type of pattern exists in the data?
- Horizontal Pattern - Trend Pattern
(b)
Develop a three-week moving average for this time series.
Compute MSE and a forecast for week 7.
If required, round your answers to two decimal places.
Week
Value
Forecast
1
17
2
13
3
15
4
11
5
15
6
13
MSE:
The forecast for week 7:
(c)
Use α = 0.2 to compute the exponential smoothing values for the time series. Compute MSE and a forecast for week 7.
If required, round your answers to two decimal places.
Week
Value
Forecast
1
17
2
13
3
15
4
11
5
15
6
13
MSE:
The forecast for week 7:
(d)
Compare the three-week moving average forecast with the exponential smoothing forecast using α = 0.2.
Which appears to provide the better forecast based on MSE?
- Three-week moving average - Exponential Smoothing
Explain.
(e)
Use trial and error to find a value of the exponential smoothing coefficient α that results in a smaller MSE than what you calculated for α = 0.20. Use a two-decimal digit precision.
alpha: