Consider the following gasoline sales time series data. Click on the webfile log

Question

Consider the following gasoline sales time series data. Click on the webfile logo to reference the data.

a. Compute four-week and five-week moving averages for the time series (to 2 decimals).

b. Compute the MSE for the four-week and five-week moving average forecasts (to 2 decimals).

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 your answer: 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)

GASOLINE SALES TIME SERIES Sales (1000s Week Of gallons) 17 21 19 23 18 16 20 18 10 20 11 15 12 0) 23 18 16 20 18 22 20 15 22 (1 ll 719386082052 s a 1212-12-2212 S_eg ee 123456789012

Explanation / Answer

from above :

MSE (4-Week) __9.65____

MSE (5-Week) _____7.41_

c)5-week moving average provides the smallest MSE

4 week 5 week week sales(A) forecast(F) (error)^2 forecast(F) (error)^2 1 17 2 21 3 19 4 23 5 18 20.00 4.00 6 16 20.25 18.06 19.60 12.96 7 20 19.00 1.00 19.40 0.36 8 18 19.25 1.56 19.20 1.44 9 22 18.00 16.00 19.00 9.00 10 20 19.00 1.00 18.80 1.44 11 15 20.00 25.00 19.20 17.64 12 22 18.75 10.56 19.00 9.00 Total 77.19 134.20 51.84 mean 9.65 12.20 7.41 MSE MSE

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