Question

A firm has the following order history over the last 6 months. January 120 February 95 March 100 April 75 May 100 June 50 What would be a 3-month weighted moving average forecast for July, using weights of 40% for the most recent month, 30% for the month preceding the most recent month, and 30% for the month preceding that one?

a. 50
b. 90
c. 72.5
d. 75

Answer 1

Answer:

(C) 72.5

Explanation:

3-month weighted moving average forecast for July is computed as the weighted average of the last 3 months - June, May and April.

July Forecast = $Weight_{June} *Order_{June} +Weight_{May} *Order_{May}+Weight_{April} *Order_{April}$

July Forecast = (40%*50)+(30%*100)+(30%*75)

July Forecast = 72.5