Figure 19.19is a time plot of quarterly natural gas sales (in billions of BTU) of a certain company, over a period of four years (data is available in NaturalGasSales.csv, data courtesy of George McCabe). The company’s analyst is asked to use a moving average to forecast sales in Winter 2005.

a. Reproduce the time plot with the overlaying MA(4) line.

b. What can we learn about the series from the MA line?

c. Run a moving average forecaster with adequate season length. Are forecasts generated by this method expected to over-forecast, under-forecast, or accurately forecast actual sales? Why?

Transcribed Image Text:

Billion BTU 130 140 150 160 170 70 120 Winter-2001 Spring-2001 Summer-2001 -Gas Sales Fall-2001 Winter-2002 Spring-2002 Summer-2002 AAA Fall-2002 Winter-2003 Spring-2003 Summer-2003 Season -prediction(Gas Sales) Fall-2003 Winter-2004 Spring-2004 Summer-2004 Fall-2004