Month 1 2 3 4 5 6 7

Value 23 15 20 12 18 22 15

1. What type of pattern exists in the data?

(a) positive trend pattern

(b) horizontal pattern

(c) vertical pattern

(d) negative trend pattern

2. 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.

3. Use a=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.

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

5. Use trial and error to find a value of the exponential smoothing coefficient "a" that results in the smallest MSE. Do not round intermediate calculations. Use a two-decimal digit precision for the exponential smoothing coefficient.