The values of Alabama building contracts (in $ millions) for a 12-month period follow.

240 350 240 270 280 320 220 320 240 320 240 240

a. Compare the three-month moving average approach with the exponential smoothing forecast using a=.2 (to 2 decimals).

MSE (3-Month)

MSE (a=.2)

Which provides more accurate forecasts based on MSE?

b. Using only the errors for months 4 to 12, the MSE for exponential smoothing is: MSE (a=.2) to 2 decimal places

Which provides more accurate forecasts based on MSE?

c. What is the forecast for the next month (to the nearest whole number)?