Month 1 2 3 4 5 6 7

Value 22 14 20 13 18 22 15

a. Develop a three-month moving average for this time series. Compute MSE and a forecast for month 8.If required, round your answers to two decimal places. Do not round intermediate calculation.

MSE:

The forecast for month 8:

b. Use= 0.2 to compute the exponential smoothing values for the time series. Compute MSE and a forecast for month 8.If required, round your answers to two decimal places. Do not round intermediate calculation.

MSE:

The forecast for month 8:

Compare the three-month moving average forecast with the exponential smoothing forecast using= 0.2.

Which appears to provide the better forecast based on MSE?

c. Use trial and error to find a value of the exponential smoothing coefficientthat results in the smallest MSE. Do not round intermediate calculations. Use a two-decimal digit precision for the exponential smoothing coefficient.

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