Use the following time-series data to answer the given questions. Time Period Va

Question

Use the following time-series data to answer the given questions. Time Period Value

1 -25

2- 32

3 -59

4- 62

5- 59

6 -65

7 -70

8 -86

9 -101

10- 97

a. Develop forecasts for periods 5 through 10 using 4-month moving averages. b. Develop forecasts for periods 5 through 10 using 4-month weighted moving averages. Weight the most recent month by a factor of 4, the previous month by 2, and the other months by 1. c. Compute the errors of the forecasts in parts (a) and (b) and observe the differences in the errors forecast by the two different techniques. (Round your answers to 3 decimal places.)

Explanation / Answer

a)as 4 period forecast =(last 4 month total)/4

from above 4 period forecast in forecast column ; and

mean absolute deviation error(MAD)=17.458

amd mean square error (MSE)=358.010

b)

4-month weighted moving averages=(4*most recent month value+2*previous month value+other 2 month total)/8

here  

mean absolute deviation error(MAD)=12.521

amd mean square error (MSE)=207.701

c)

as MAD and MSE are less for 4-month weighted moving averages ; hence it is better forecast for above data

s. no actual(A) forecast(F) |A-F| (A-F)^2 1 25 2 32 3 59 4 62 5 59 44.5 14.500 210.250 6 65 53 12.000 144.000 7 70 61.25 8.750 76.563 8 86 64 22.000 484.000 9 101 70 31.000 961.000 10 97 80.5 16.500 272.250 total 104.750 2148.063 average 17.458 358.010

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