Consider the following time series data:

Month	1	2	3	4	5	6	7
Value	24	15	21	13	19	21	16

(a)

(b)

Develop a three-month moving average for this time series. Compute MSE and a forecast for month 8.

If required, round your answers to two decimal places. Do not round intermediate calculation.

MSE:

The forecast for month 8:

(c)

Use = 0.2 to compute the exponential smoothing values for the time series. Compute MSE and a forecast for month 8.

If required, round your answers to two decimal places. Do not round intermediate calculation.

MSE:

The forecast for month 8:

(d)

Compare the three-month moving average forecast with the exponential smoothing forecast using = 0.2. Which appears to provide the better forecast based on MSE?

- Select your answer -3-month moving averageexponential smoothingItem 7

(e)

Use trial and error to find a value of the exponential smoothing coefficient that results in the smallest MSE.

Do not round intermediate calculations. Use a two-decimal digit precision for the exponential smoothing coefficient.

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