Question

According to the Energy Information Administration, the United States consumes about 21 million barrels (882 million gallons) of petroleum each day. About half of this consumption is in the form of gasoline. Table 18.2 shows a portion of weekly U.S. finished motor gasoline production, measured in thousands of barrels per day.

1. Construct a 3-period moving average series for the data.

2.) Plot production and its corresponding 3-period moving average, and comment on any differences.

3.) Using the 3-period moving average series, forecast gasoline production on May 29, 2009 (week 22).

4.) Calculate the mean square error, MSE, and the mean absolute deviation,

Date	Week	Production
January 2, 2009	1	9115
January 9, 2009	2	8813
January 16, 2009	3	8729
January 23, 2009	4	8660
January 30, 2009	5	8679
February 6, 2009	6	8492
February 13, 2009	7	8765
February 20, 2009	8	8937
February 27, 2009	9	9003
March 6, 2009	10	8539
March 13, 2009	11	8868
March 20, 2009	12	8723
March 27, 2009	13	8733
April 3, 2009	14	8966
April 10, 2009	15	8913
April 17, 2009	16	9088
April 24, 2009	17	8790
May 1, 2009	18	8918
May 8, 2009	19	8710
May 15, 2009	20	8735
May 22, 2009	21	9378

Answer 1

1. Construct a 3-period moving average series for the data.

Ans:

Week	Production	3-period moving average
1	9115
2	8813	8885.667
3	8729	8734
4	8660	8689.333
5	8679	8610.333
6	8492	8645.333
7	8765	8731.333
8	8937	8901.667
9	9003	8826.333
10	8539	8803.333
11	8868	8710
12	8723	8774.667
13	8733	8807.333
14	8966	8870.667
15	8913	8989
16	9088	8930.333
17	8790	8932
18	8918	8806
19	8710	8787.667
20	8735	8941
21	9378

2.) Plot production and its corresponding 3-period moving average, and comment on any differences.

Comment The corresponding 3-period moving average has slightly smoother than the actual data plot.

3.) Using the 3-period moving average series, forecast gasoline production on May 29, 2009 (week 22).

Ans: Using the 3-period moving average series, forecast gasoline production on May 29, 2009 is  8941.

4.) Calculate the mean square error, MSE, and the mean absolute deviation,

Ans:

MSE=MSD = 24172.7

mean absolute deviation=MAD = 117.5

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