The monthly sales revenue (in hundreds of dollars) of a company for one year is listed below.
Month
Sales ($100s)
January
12,354
February
13,657
March
14,536
April
13,478
May
16,590
June
19,790
July
17,987
August
18,657
September
19,765
October
18,678
November
20,678
December
23,675
a. Compute MSE using the most recent value as the forecast for the next period. What is the forecast for the next month?
b. Compute MSE using the average of all the data available as the forecast for the next period. What is the forecast for the next month?
c. Which method appears to provide the better forecast?