Three month moving average forecast and using mean square er

Three month moving average forecast and using mean square errors

Solution

3 month moving average forecast is calculated by taking average of 3 months of data.

according to the data given in question.

3 month average forecast will be (240+350+230)/3 = 273.3

b) 0.2 exponential smoothing factor = 0.2*350 + 0.8*240 = 70+ 192 = 262

c)yes three month moving average is more accurate as its more objective and exponential smoothing is rather a

predictive one