Chapter 18, Problem 1SR

To determine

Obtain the three-year moving average.

Draw a graph for both original data and the moving average.

Answer to Problem 1SR

The three-year moving averages are 4, 5, 4, and 6.

The plot for original data and the moving average is shown below:

Explanation of Solution

Moving average:

It is used to smooth the fluctuations in time series data in order to see its trend.

The three-year moving averages for sales are obtained below:

Year	Number Produced	3-year moving average
2008	2	—
2009	6	$\frac{2+6+4}{3}=4$
2010	4	$\frac{6+4+5}{3}=5$
2011	5	$\frac{4+5+3}{3}=4$
2012	3	$\frac{5+3+10}{3}=6$
2013	10	—

Step-by-step procedure to draw the scatter plot for data values and 3-year moving average values using the Excel:

• Enter the data for year, number produced, and 3-year moving averages in an Excel sheet.
• Select the columns of “Number Produced” and “3-year moving average”.
• Go to Insert menu.
• Select Line chart.

Thus, the plot for original data and the moving averages are obtained.