For the data of given Exercise:
a. Obtain the centered moving average for N = 4; for N = 12.
b. When N = 12 months, the centered moving average is relatively smooth compared to N = 4. Aside from the fact that it includes a greater number of months at a time, is there any other reason why the moving average with N = 12 should be so smooth?
Exercise
The following data describe the monthly volume for an urban courier service. Data are in thousands of pieces handled.
a. Construct a graph of the time series. Does the overall trend appear to be upward or downward?
b. Determine the three-month and five-month centered moving average curves and superimpose each on the original time series.