The following time series data show the number of lightning strikes in a particular county for the most recent seven months. Month 1 2 3 4 5 6 7 Value 27 16 23 15 22 26 18 (a) Compute MSE using the most recent value as the forecast for the next period.

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The following time series data show the number of lightning strikes in a particular county for the most recent seven months.
Month 1 2 3 4 5 6 7
Value
27 16 23 15 22 26 18
(a) Compute MSE using the most recent value as the forecast for the next period.
MSE =
What is the forecast for month 8?
(b) Compute MSE using the average of all the data available as the forecast for the next period. (Round your answer to two
decimal places.)
MSE =
What is the forecast for month 8?
(c) Which method appears to provide the better forecast?
● The average of all the previous values provides a better forecast, because its MSE is smaller than the MSE using the
most recent value.
O The average of all the previous values provides a better forecast, because its forecast for month 8 is larger than the
month 8 forecast using the most recent value.
The most recent value provides a better forecast, because its MSE is smaller than the MSE using the average of all the
previous values.
The most recent value provides a better forecast, because its forecast for month 8 is smaller than the month 8
forecast using the average of all the previous values.
Transcribed Image Text:The following time series data show the number of lightning strikes in a particular county for the most recent seven months. Month 1 2 3 4 5 6 7 Value 27 16 23 15 22 26 18 (a) Compute MSE using the most recent value as the forecast for the next period. MSE = What is the forecast for month 8? (b) Compute MSE using the average of all the data available as the forecast for the next period. (Round your answer to two decimal places.) MSE = What is the forecast for month 8? (c) Which method appears to provide the better forecast? ● The average of all the previous values provides a better forecast, because its MSE is smaller than the MSE using the most recent value. O The average of all the previous values provides a better forecast, because its forecast for month 8 is larger than the month 8 forecast using the most recent value. The most recent value provides a better forecast, because its MSE is smaller than the MSE using the average of all the previous values. The most recent value provides a better forecast, because its forecast for month 8 is smaller than the month 8 forecast using the average of all the previous values.
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