Consider the following time series data.

Week	1	2	3	4	5	6
Value	18	15	15	13	17	14

(a)	Choose the correct time series plot.
(i)
(ii)
(iii)
(iv)

What type of pattern exists in the data?

a. Horizontal Pattern

b. Trend Pattern

(b)

Develop a three-week moving average for this time series. Compute MSE and a forecast for week 7.

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

Week	Value	Forecast
1	18
2	15
3	15
4	13
5	17
6	14

MSE:

The forecast for week 7:

(c)

Use = 0.2 to compute the exponential smoothing values for the time series. Compute MSE and a forecast for week 7.

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

Week	Value	Forecast
1	18
2	15
3	15
4	13
5	17
6	14

MSE:

The forecast for week 7:

(d)

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

a. Three-week moving average

b. Exponential Smoothing

Explain.

Using this approach results in a ____ MSE.

a. larger

b. smaller

(e)

Use trial and error to find a value of the exponential smoothing coefficient that yields the minimum MSE. Do not round intermediate calculations. Use a two-decimal digit precision for the exponential smoothing coefficient.

alpha: