Forecast the data for 2000 with exponential smoothing with w = 0.3 and w = 0.7. Is this a better forecast than the moving average? Compare RMSEs for moving average and exponential forecast to answer "Is this a better forecast than the moving average" ? Use 166.63, the mean of all 36 months, as the initial forecast for Jan. 1998 for both exponential smoothing forecast.

Time	CPI	forecast(w=0.3)	(A-F)^2	forecast(w=0.7)	(A-F)^2
Jan-98	161.0	166.63		166.63
Feb-98	161.1	164.94
Mar-98	161.4	163.79
Apr-98	161.8	163.07
May-98	162.3	162.69
Jun-98	162.2	162.57
Jul-98	162.1	162.46
Aug-98	162.6	162.35
Sep-98	162.6	162.43
Oct-98	163.2	162.48
Nov-98	163.4	162.70
Dec-98	163.5	162.91
Jan-99	164.2	163.08
Feb-99	164.6	163.42
Mar-99	165.0	163.77
Apr-99	166.6	164.14
May-99	166.2	164.88
Jun-99	165.4	165.28
Jul-99	165.8	165.31
Aug-99	166.3	165.46
Sep-99	167.2	165.71
Oct-99	167.2	166.16
Nov-99	167.1	166.47
Dec-99	167.3	166.66
Jan-00	167.9	166.85	1.10
Feb-00	169.3	167.17	4.55
Mar-00	170.7	167.81	8.37
Apr-00	170.6	168.67	3.71
May-00	171.1	169.25	3.41
Jun-00	171.0	169.81	1.42
Jul-00	171.7	170.16	2.36
Aug-00	172.2	170.63	2.48
Sep-00	173.3	171.10	4.85
Oct-00	173.8	171.76	4.17
Nov-00	173.5	172.37	1.28
Dec-00	173.5	172.71	0.62
		MSE	3.19
		RMSE	1.79

Answer rating: 100% (QA)

The formula for exponential smoothing ... View the full answer