Refer again to the gasoline sales time series data in the following table. Using a weight of 1/2 for the most recent observation, 1/3 for the second most recent, and 1/6 for third most recent, compute a three-week weighted moving average for the time series. Use rounded for two decimal places values for intermediate calculations. Use minus sign for negative values. Compute the MSE for the weighted moving average in part a. Do you prefer this weighted moving average to the unweighted moving average? Remember that the MSE for the unweighted moving average is 10.22. Round your answer to two decimal places. Suppose you are allowed to choose any weights as long as they sum to 1. Could you always find a set of weights that would make the MSE smaller for a weighted moving average than for an unweighted moving average? Why or why not?

Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
icon
Related questions
Question

Refer again to the gasoline sales time series data in the following table.

Using a weight of 1/2 for the most recent observation, 1/3 for the second most recent, and 1/6 for third most recent, compute a three-week weighted moving average for the time series. Use rounded for two decimal places values for intermediate calculations. Use minus sign for negative values.

Compute the MSE for the weighted moving average in part a. Do you prefer this weighted moving average to the unweighted moving average? Remember that the MSE for the unweighted moving average is 10.22. Round your answer to two decimal places.

Suppose you are allowed to choose any weights as long as they sum to 1. Could you always find a set of weights that would make the MSE smaller for a weighted moving average than for an unweighted moving average? Why or why not?

Problem 15-08 (Algorithmic)
Refer again to the gasoline sales time series data in the following table.
Sales (1000s of gallons)
18
2
24
3
19
4
24
5
17
IT
6
16
7
22
8
19
9
24
10
21
16
22
Week
1
11
12
a. Using a weight of 1/2 for the most recent observation, 1/3 for the second most recent, and 1/6 for third most recent, compute a three-week weighted moving average for the time series. Use rounded for two decimal places values for intermediate calculations. Use minus sign for negative values.
Week
1
2
3
4
5
6
7
8
9
10
11
12
MSE =
Sales
18
Prefer the
24
19
24
17
16
22
19
24
21
16
22
Weighted Moving
Average Forecast
Forecast
Error
b. Compute the MSE for the weighted moving average in part a. Do you prefer this weighted moving average to the unweighted moving average? Remember that the MSE for the unweighted moving average is 10.22. Round your answer to two decimal places.
Total
moving average here.
(Error)²
c. Suppose you are allowed to choose any weights as long as they sum to 1. Could you always find a set of weights that would make the MSE smaller for a weighted moving average than for an unweighted moving average? Why or why not?
The input in the box below will not be graded, but may be reviewed and considered by your instructor.
Transcribed Image Text:Problem 15-08 (Algorithmic) Refer again to the gasoline sales time series data in the following table. Sales (1000s of gallons) 18 2 24 3 19 4 24 5 17 IT 6 16 7 22 8 19 9 24 10 21 16 22 Week 1 11 12 a. Using a weight of 1/2 for the most recent observation, 1/3 for the second most recent, and 1/6 for third most recent, compute a three-week weighted moving average for the time series. Use rounded for two decimal places values for intermediate calculations. Use minus sign for negative values. Week 1 2 3 4 5 6 7 8 9 10 11 12 MSE = Sales 18 Prefer the 24 19 24 17 16 22 19 24 21 16 22 Weighted Moving Average Forecast Forecast Error b. Compute the MSE for the weighted moving average in part a. Do you prefer this weighted moving average to the unweighted moving average? Remember that the MSE for the unweighted moving average is 10.22. Round your answer to two decimal places. Total moving average here. (Error)² c. Suppose you are allowed to choose any weights as long as they sum to 1. Could you always find a set of weights that would make the MSE smaller for a weighted moving average than for an unweighted moving average? Why or why not? The input in the box below will not be graded, but may be reviewed and considered by your instructor.
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 4 steps with 3 images

Blurred answer
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
Practical Management Science
Practical Management Science
Operations Management
ISBN:
9781337406659
Author:
WINSTON, Wayne L.
Publisher:
Cengage,
Operations Management
Operations Management
Operations Management
ISBN:
9781259667473
Author:
William J Stevenson
Publisher:
McGraw-Hill Education
Operations and Supply Chain Management (Mcgraw-hi…
Operations and Supply Chain Management (Mcgraw-hi…
Operations Management
ISBN:
9781259666100
Author:
F. Robert Jacobs, Richard B Chase
Publisher:
McGraw-Hill Education
Business in Action
Business in Action
Operations Management
ISBN:
9780135198100
Author:
BOVEE
Publisher:
PEARSON CO
Purchasing and Supply Chain Management
Purchasing and Supply Chain Management
Operations Management
ISBN:
9781285869681
Author:
Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson
Publisher:
Cengage Learning
Production and Operations Analysis, Seventh Editi…
Production and Operations Analysis, Seventh Editi…
Operations Management
ISBN:
9781478623069
Author:
Steven Nahmias, Tava Lennon Olsen
Publisher:
Waveland Press, Inc.