Practical Management Science
Practical Management Science
6th Edition
ISBN: 9781337406659
Author: WINSTON, Wayne L.
Publisher: Cengage,
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Corporate triple-A bond interest rates for 12 consecutive months are as follows.
9.5 9.4 9.5 9.7 9.8 9.8 9.9 10.6 10.0 9.8 9.7 9.7
(a)
Construct a time series plot. What type of pattern exists in the data?
The data appear to follow a trend pattern.The data appear to follow a horizontal pattern.    The data appear to follow a seasonal pattern.The data appear to follow a cyclical pattern.
(b)
Develop three-month and four-month moving averages for this time series. (Round your answers to two decimal places.)
Month Time Series
Value
3-Month Moving
Average Forecast
4-Month Moving
Average Forecast
1 9.5    
2 9.4    
3 9.5    
4 9.7    
5 9.8    
6 9.8    
7 9.9    
8 10.6    
9 10.0    
10 9.8    
11 9.7    
12 9.7    
Does the three-month or four-month moving average provide the better forecasts based on MSE? Explain.
The four-month moving average provides more accurate forecasts, because its MSE is smaller than that of the three-month moving average.The three-month moving average provides more accurate forecasts, because its MSE is smaller than that of the four-month moving average.    The four-month moving average provides more accurate forecasts, because its MSE is larger than that of the three-month moving average.The three-month moving average provides more accurate forecasts, because its MSE is larger than that of the four-month moving average.
(c)
Using the more accurate approach, what is the moving average forecast for the next month? (Round your answer to two decimal places.)
 
 
 
 
 
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