Question: This the same data from the Starbucks example. Again, we want to make a forecast for the 19th week. This time, we will try
This the same data from the Starbucks example. Again, we want to make a forecast for the 19th week. This time, we will try use MSE to choose the best forecasting method. You are already given the work for 3-week moving average forecast and the exponential smoothing method with alpha= 0.2. Format your answers rounded to one decimal digit, e.g., 123.4. Find the forecast and the MSE using: (a) 2-week moving average, (b) 4-week moving average, (c) Out of the three moving average methods, 2-week, 3-week, and 4-week, which gives the best forecast based on the MSE? (d) Use Excel Solver to find the alpha for exponential smoothing that minimizes the MSE. (e) Which forecast is better between (c) and (d) based on MSE?
Step by Step Solution
3.45 Rating (168 Votes )
There are 3 Steps involved in it
To solve this problem we will use the provided data to calculate the forecasts and Mean Squared Erro... View full answer
Get step-by-step solutions from verified subject matter experts
