Question

The owner of Darkest Tans Unlimited in a local mall is forecasting this month's (October's) demand for the one new tanning booth based on the following historical data:

col1 Month April May June July August September
col2 Number of Visits 100 140 110 150 120 160

What is this month's forecast using a four-month weighted moving average with weights of .4. .3.2, and .1?

a. 135
b. 120
c. 129
d. 140
e. 141

Answer 1

Answer:

e. 141

Explanation:

We will multiply the values of the last four month by the weight estimated for each one. Then we add them together to get the budget sales for October

Month        Units   weight   weighted amount

September 160 x 40%        64

August       120 x 30%         36

July            150 x 20%         30

June            110 x 10%         11    

October:                             141