Compute the one-step-ahead three-month and six-month moving-average forecasts for July through December. What effect does increasing N from 3 to 6 have on the forecasts?

Question

Mathematics

Sophia Hess

23 February, 07:11

Compute the one-step-ahead three-month and six-month moving-average forecasts for July through December. What effect does increasing N from 3 to 6 have on the forecasts?

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Dodson · Answer 1

22.6%, It will provide enough adjustment to suit the chage in work plane

Step-by-step explanation:

Let probability of moving average forecasts, p = 6 months/12 months = 1/2

and probability of not moving average forecasts, q = 1/2

Also, number of months in a year, n = 12

Hence, P (r=6) nCr*p^r*q^n-r = 12C6 * (1/2) ^6 * (1/2) ^6 where r = months interval

= 12*11*10*9*8*7/6! X (1/64) X (1/64) = 924/4096 = 0.226

Then the percentage of 0.226 is 22.6%