Problem
Natural Gas Sales. Figure 18.11 is a time plot of quarterly natural gas sales (in billions of BTU) of a certain company, over a period of 4 years (data courtesy of George McCabe). The company's analyst is asked to use a moving average to forecast sales in Winter 2005.
a. Reproduce the time plot with the overlaying MA(4) line.
b. What can we learn about the series from the MA line?
c. Run a moving average forecaster with adequate season length. Are forecasts generated by this method expected to over-forecast, under-forecast, or accurately forecast actual sales? Why?