Chapter 17.3, Problem 5E

Consider the following time series data.

1. a. Construct a time series plot. What type of pattern exists in the data?
2. b. Develop the three-week moving average forecasts for this time series. Compute MSE and a forecast for week 7.
3. c. Use α = .2 to compute the exponential smoothing forecasts for the time series. Compute MSE and a forecast for week 7.
4. d. Compare the three-week moving average approach with the exponential smoothing approach using α = .2. Which appears to provide more accurate forecasts based on MSE? Explain.
5. e. Use a smoothing constant of α = .4 to compute the exponential smoothing forecasts. Does a smoothing constant of .2 or .4 appear to provide more accurate forecasts based on MSE? Explain.