Ex 5:

5.

Consider the following time series data.

Week

1

2

3

4

5

6

Value

18

13

16

11 17 14

1. Construct a time series plot. What type of pattern exists in the data?

2. Develop the three-week moving average forecasts for this time series. Compute

MSE and a forecast for week 7.

3. Use alpha = 0.2 to compute the exponential smoothing forecasts for the time

series. Compute MSE and a forecast for week 7.

4.

Compare the three-week moving average approach with the exponential

smoothing approach using alpha=0.2. Which appears to provide more accurate

forecasts based on MSE? Explain.

5. Use a smoothing constant of alpha=0.4 to compute the exponential smoothing

forecasts. Does a smoothing constant of .2 or 4 appear to provide more

accurate forecasts based on MSE? Explain.