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The following time series data show the number of lightning strikes in a particular county for the most recent seven months. Month 1 2 3 4 5 6 7 Value 34 23 30 22 29 33 25 (a) Compute MSE using the most recent value as the forecast for the next period. MSE = What is the forecast for month 8? (b) Compute MSE using the average of all the data available as the forecast for the next period. (Round your answer to two decimal places.) MSE = What is the forecast for month 8? (c) Which method appears to provide the better forecast? The most recent value provides a better forecast, because its forecast for month 8 is smaller than the month 8 forecast using the average of all the previous values. The average of all the previous values provides a better forecast, because its forecast for month 8 is larger than the month 8 forecast using the most recent value. The average of all the previous values provides a better forecast, because its MSE is smaller than the MSE using the most recent value. The most recent value provides a better forecast, because its MSE is smaller than the MSE using the average of all the previous values.

The following time series data show the number of lightning strikes in a particular county for the most recent seven months. Month 1 2 3 4 5 6 7 Value 34 23 30 22 29 33 25 (a) Compute MSE using the most recent value as the forecast for the next period. MSE = What is the forecast for month 8? (b) Compute MSE using the average of all the data available as the forecast for the next period. (Round your answer to two decimal places.) MSE = What is the forecast for month 8? (c) Which method appears to provide the better forecast? The most recent value provides a better forecast, because its forecast for month 8 is smaller than the month 8 forecast using the average of all the previous values. The average of all the previous values provides a better forecast, because its forecast for month 8 is larger than the month 8 forecast using the most recent value. The average of all the previous values provides a better forecast, because its MSE is smaller than the MSE using the most recent value. The most recent value provides a better forecast, because its MSE is smaller than the MSE using the average of all the previous values.

Practical Management Science
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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The following time series data show the number of lightning strikes in a particular county for the most recent seven months. Month 1 2 3 4 5 6 7 Value 34 23 30 22 29 33 25 (a) Compute MSE using the most recent value as the forecast for the next period. MSE = What is the forecast for month 8? (b) Compute MSE using the average of all the data available as the forecast for the next period. (Round your answer to two decimal places.) MSE = What is the forecast for month 8? (c) Which method appears to provide the better forecast? The most recent value provides a better forecast, because its forecast for month 8 is smaller than the month 8 forecast using the average of all the previous values. The average of all the previous values provides a better forecast, because its forecast for month 8 is larger than the month 8 forecast using the most recent value. The average of all the previous values provides a better forecast, because its MSE is smaller than the MSE using the most recent value. The most recent value provides a better forecast, because its MSE is smaller than the MSE using the average of all the previous values.
Transcribed Image Text:The following time series data show the number of lightning strikes in a particular county for the most recent seven months. Month 1 2 3 4 5 6 7 Value 34 23 30 22 29 33 25 (a) Compute MSE using the most recent value as the forecast for the next period. MSE = What is the forecast for month 8? (b) Compute MSE using the average of all the data available as the forecast for the next period. (Round your answer to two decimal places.) MSE = What is the forecast for month 8? (c) Which method appears to provide the better forecast? The most recent value provides a better forecast, because its forecast for month 8 is smaller than the month 8 forecast using the average of all the previous values. The average of all the previous values provides a better forecast, because its forecast for month 8 is larger than the month 8 forecast using the most recent value. The average of all the previous values provides a better forecast, because its MSE is smaller than the MSE using the most recent value. The most recent value provides a better forecast, because its MSE is smaller than the MSE using the average of all the previous values.
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