Question

Refer to the gasoline sales time series data in the given table. 

a. Compute four-week and five-week moving averages for the time series. Round your answers to two decimal places.

b. Compute the MSE for the four-week and five-week moving average forecasts. Round your intermediate calculations and final answers to two decimal places. 

MSE for four-week moving average = 

MSE for five-week moving average = 

c. What appears to be the best number of weeks of past data (three, four, or five) to use in the moving average computation? Recall that MSE for the three-week moving average is 11.94.

Answer 1

(A) Four week moving average

Five week moving average:

(B) MSE for four week average is 13.12 while MSE for five week average is 10.63 is is calculated below

Four week average

Five week average

As MSE for 5 week average is least as 10.63 hence preferred.