Refer again to the gasoline sales time series data in the following table. a. Us

Question

Refer again to the gasoline sales time series data in the following table.

a. Using a weight of 1/2 for the most recent observation, 1/3 for the second most recent, and 1/6 for third most recent, compute a three-week weighted moving average for the time series. Use rounded for two decimal places values for intermediate colculations.

b. Compute the MSE for the weighted moving average in part a. Do you prefer this weighted moving average to the unweighted moving average? Remember that the MSE for the unweighted moving average is 10.22. Round your answer to two decimal places.

MSE= ????

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Explanation / Answer

b)MSE for weighted moving average is 19.62(calculationshown below) which is greater than MSE for unweighted hence we willl prefer unweighted MSE for this data

a)

WEIGHTED MOVING AVE. FORECAST ERROR ERROR^2 1 17 2 24 3 19 4 24 20.33 3.67 13.44 5 19 22.33 -3.33 11.11 6 17 20.67 -3.67 13.44 7 19 18.83 0.17 0.03 8 16 18.33 -2.33 5.44 9 23 17.17 5.83 34.03 10 21 20.00 1.00 1.00 11 14 20.83 -6.83 46.69 12 25 17.83 7.17 51.36

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