Problem

Forecasting with a Moving Average. For a given time series of sales, the training set consists of 50 months. The first 5 months' data are shown below:

 Month               Sale
Sept 98              27
Oct 98                31
Nov 98               58
Dec 98               63
Jan 99                59

a. Compute the sales forecast for January 1999 based on a moving average with w = 4.

b. Compute the forecast error for the above forecast.