How a better forecast than the moving average

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Reference no: EM13224069

a) The following table reports the Consumer Price Index for the Los Angeles area on a monthly basis from January 1998 to Decemeber 2000 (Base year = 1982-1984). Eliminating the data for 2000, use Excel to forecast the index for all of 2000 using a three - and six month average. Which provides a better forecast 2000 using the data provided?

b) Forecast the data for 2000 again in problem 1 with exponential smoothing with w= .3 and w = 0.7. Is this a better forecast than the moving average.

CPI 3-month Moving A-F (A-F)2 6-month Moving A-F (A-F)2 Average/Forecast (F) Average Forecast (F) 161 161.1 161.4 161.8 162.3 162.2 162.1 162.6 162.6 162.6 163.2 163.4 163.5 164.2 164.6 165 166.6 166.2 165.4 165.8 166.3 167.2 167.2 167.1 167.3 167.9 169.3 170.7 170.6 171.1 171 171.7 172.2 173.3 173.8 173.5 173.5

Reference no: EM13224069

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