The following data shows the quarterly profit (in thousands of dollars) made by a particular company in the past 3 years.
a. Use α = 0.3 to compute the exponential smoothing values for the time series. Compute MSE and the forecast of profit (in $1000s) for the next quarter.
b. Compare the three-period moving average forecast with the exponential smoothing forecast using α = 0.3. Which appears to provide the better forecast based on MSE?

Question

The following data shows the quarterly profit (in thousands of dollars) made by a particular company in the past 3 years.
  a. Use α = 0.3 to compute the exponential smoothing values for the time series. Compute MSE and the forecast of profit (in $1000s) for the next quarter.
b. Compare the three-period moving average forecast with the exponential smoothing forecast using α = 0.3. Which appears to provide the better forecast based on MSE?

Quizplus · Accepted Answer

The Answer of The following data shows the quarterly profit (in thousands of dollars) made by a particular company in the past 3 years.
  a. Use α = 0.3 to compute the exponential smoothing values for the time series. Compute MSE and the forecast of profit (in $1000s) for the next quarter.
b. Compare the three-period moving average forecast with the exponential smoothing forecast using α = 0.3. Which appears to provide the better forecast based on MSE?

The Following Data Shows the Quarterly Profit (In Thousands of Dollars)