Stat week 3

Linear Trend

The average price per gallon of gasoline in major U.S. cities for each month during the years 1999-2001 are shown in the table below:

Month 1999 2000 2001 January 0.972 1.301 1.472 February 0.955 1.369 1.484 March 0.991 1.541 1.447 April 1.117 1.506 1.564 May 1.178 1.498 1.729 June 1.148 1.617 1.640 July 1.189 1.593 1.482 August 1.255 1.510 1.427 September 1.280 1.582 1.531 October 1.274 1.559 1.362 November 1.264 1.555 1.263 December 1.298 1.489 1.131

Forecast the average gasoline price for January 2002 using linear trend analysis.

a. What is the linear equation that best fits the data? b. Graph the data. c. What is the forecast for the average gasoline price for January 2002? d. What is the MAPE for this method? e. Is this method more accurate than exponential smoothing for this data set?