Question

Weekly income for an online greeting card business, is provided below. Determine, on the basis of minimizing the mean square error, whether a three-period or four-period simple moving average gives a better forecast.

Week	Income
1	980
2	1040
3	1120
4	1050
5	960
6	990
7	1030
8	1260
9	1240
10	1100

The three-period simple moving average gives a better forecast because it has the smallest MSE

There is not enough information to determine the answer

Both the four-period & three-period simple moving averages have the same forecast accuracy in terms of their MSE

The four-period simple moving averages gives a better forecast because it has the smallest MSE

Answer 1

Three-period simple moving average:

Four-period simple moving average: