Consider the following gasoline sales time series data Click on the datafile log

Question

Consider the following gasoline sales time series data Click on the datafile logo to reference the data DATAfile GASOLINE SALES TIME SERIES Sales (1000s of gallons) 17 21 19 23 Week 16 20 10 20 15 12 a. Compute four-week and five-week moving averages for the time series. What are the respective forecasts for week 13? (to 2 decimals) four-week five-week b. Compute the MSE for the four-week and five-week moving average forecasts (to 2 decimals). Round intermediate calculations to two decimal places. MSE(4-Week) MSE(5-Week) c. What appears to be the best number of weeks of past data (three, four, or five) to use in the moving average computation? Recall that MSE for the three-week moving average is 10.22 Select The 3-week moving average provides the smallest MSE The 4-week moving average provides the smallest MSE The 5-week moving average provides the smallest MSE Check My Work

Explanation / Answer

for 4 week moving forecast:

for 5 week forecast:

a)

four week 13th week forecast =19.75

five week 13th week forecast =19.40

b)

MSE (4 week)=9.65

MSE (5 week)=7.41

c)

the 5 week moving average provides smallest MSE

week sales(A) forecast(F) (A-F)^2 1 17 2 21 3 19 4 23 5 18 20.00 4 6 16 20.25 18.06 7 20 19.00 1 8 18 19.25 1.56 9 22 18.00 16 10 20 19.00 1 11 15 20.00 25 12 22 18.75 10.56 19.75 average 9.65

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