Consider the following time series data. Month 1 2 3 4 5 6 Value 26 15 22 14 21 25 17
Chapter4: Linear Functions
Section4.3: Fitting Linear Models To Data
Problem 24SE: Table 6 shows the year and the number ofpeople unemployed in a particular city for several years....
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Transcribed Image Text:(c) Use a = 0.2 to compute the exponential smoothing forecasts for the time series. (Round your answers to two decimal places.)
Time Series
Month
Forecast
Value
1
26
2
15
3
22
4
14
5
21
6
25
7
17
Compute MSE. (Round your answer to two decimal places.)
MSE =
What is the forecast for month 8? (Round your answer to two decimal places.)
(d) Compare the three-month moving average approach with the exponential smoothing approach using a = 0.2. Which appears to provide more accurate forecasts based on MSE?
O The exponential smoothing using a = 0.2 provides a better forecast since it has a larger MSE than the three-month moving average.
O The three-month moving average provides
better forecast since it has a smaller MSE than the exponential smoothing using a = 0.2.
O The three-month moving average provides a better forecast since it has a larger MSE than the exponential smoothing using a = 0.2.
O The exponential smoothing using a = 0.2 provides a better forecast since it has a smaller MSE than the three-month moving average.
Transcribed Image Text:Consider the following time series data.
Month
1
2
3
4
5
6
7
Value 26 15
22
14
21
25
17
(a) Construct a time series plot.
30
30т
30 T
30
25
25
25
25
20
20
20
20
15-
15
15
15
10-
10-
10+
10-
5+
5-
5
5-
0-
0 1 2 3 4 5 6 7
0 1 2 3 4 5 6 7
0 1
4 5 6 7 8
4 5 6 7
8.
8.
2
3
Month
Month
Month
Month
What type of pattern exists in the data?
O The data appear to follow a cyclical pattern.
O The data appear to follow a trend pattern.
O The data appear to follow a seasonal pattern.
O The data appear to follow a horizontal pattern.
(b) Develop the three-month moving average forecasts for this time series.
Time Series
Month
Forecast
Value
1
26
15
22
14
21
6
25
7
17
Compute MSE. (Round your answer to two decimal places.)
MSE =
What is the forecast for month 8?
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