Question

• eBook

Refer to the gasoline sales time series data in the given table.

Week	Sales (1,000s of gallons)
1	17
2	21
3	16
4	24
5	17
6	18
7	22
8	20
9	21
10	19
11	16
12	25

(a)	Compute four-week and five-week moving averages for the time series.
	If required, round your answers to two decimal places.
	Week Sales 4 Period Moving Average 5 period Moving Average 1 17 2 21 3 16 4 24 5 17 6 18 7 22 8 20 9 21 10 19 11 16 12 25
(b)	Compute the MSE for the four-week and five-week moving average forecasts.
	If required, round your final answers to three decimal places.
	MSE for four-week moving average =
	MSE for five-week moving average =
(c)	What appears to be the best number of weeks of past data (three, four, or five) to use in the moving average computation? Consider that the MSE for the three-week moving average is 12.852.

Answer 1

a) Compute four-week moving average.

Compute five-week moving averages for the time series

b)  the mean square error is MSE of 4 years moving average = (6.25+ 2.25+10.5625+0.0625+3.0625+1.5625+20.25+36)/8=10

The mean square error is MSE of 5 years moving average= (1 + 7.84 + 0.36 + 0.64 + 0.36+16 + 29.16)/8 = 7.91

c)  The 4 years moving average is less than compare to 5 years and 3 years moving average

Therefore, 4 years moving average is best method to the given data