a) ) A four week moving average averages the actual demand for the previous four weeks to generate the forecast for the next week.This can be calculated as Sum of the actual value of the previous four weeks / 4
Using the above formula the forecast for week 5 through 12 is calculated below:
A five week moving average averages the actual demand for the previous five weeks to generate the forecast for the next week.This can be calculated as Sum of the actual value of the previous five weeks / 5
Using the above formula the forecast for week 6 through 12 is calculated below:
b) To calculate the MSE ,we have to calculate the error and squared error for each method for each week first.
Error = Actual value - Forecast value
Squared error = Square of the error
Using the above two formula first the errors and squared errors and then the MSE for each method is calculated below:
Calculation of MSE for four-week moving average
The error and squared error for week 5 through 12 is calculated below:
MSE = Sum of the squared errors for all the weeks / number of weeks
= (12.25+27.56+2.25+4+13.84+3.06+30.28+12.96) / 8
= 106.2 / 8
= 13. 28
Calculation of MSE for five-week moving average
The error and squared error for week 6 through 12 is calculated below:
MSE = Sum of the squared errors for all the weeks / number of weeks
= (17.47+0.64+3.24+5.76+4+21.16+12.96) / 7
= 62.23 / 7
= 8.89
Refer to the gasoline sales time series data in the given table. Sales (1000s of gallons)...
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