only part C with methodology

Problems / Solutions 7. Refer to the gasoline sales time series data in Table 6.1. Compute four-week and five week moving averages for the time series. a. Sales Week (1000s of gallons) 4-Week 5 Week Moving moving Average average Error (4 week moving average) (Error)^2 Error (5 week moving average) (Error)^2 1 17 2 21 19 3 4 5 23 20 -2 4 -3.6 6 18 16 20 18 22 20.25 19 7 8 19.6 19.4 19.2 19 18.8 19.2 19 -4.25 1 -1.25 4 19.25 18 18.06 1 1.56 16 1 25 10.56 77.18 9 10 12.96 0.36 1.44 9 1.44 17.64 9 1 0.6 -1.2 3 1.2. -4.2 3 Total = 11 19 20 18.75 20 15 22 -5 3.25 Totals 12 51.84 MSE=1 (observed values-predicted values)^2 MSE (4-Week moving Average) 9.6475 MSE (S-Week moving Average) 7.4057143 b Compute the MSE for the four-week and five-week moving average forecasts. 2 Head MSE (4-Week moving Average) 9.6475 MSE (5-Week moving Average) 7.4057143 b. Compute the MSE for the four-week and five-week moving average forecasts. 4-week MSE = 77.18/8 = 9.6475 5-week MSE 51.84/7 = 7.4057 What appears to be the best number of weeks of past data (three, four, or five) to use in the moving average computation? recall that MSE for the three-week moving average is 10.22. C