Question

Suppose that you want to set up a 3-month weighted moving average forecasting system. You want the weights to be percentages (that add to 100%). Furthermore, you want weights for the most recent two months to be equal but you want each of those weights to be twice as large as the weight for the oldest month. What should the weight be for the oldest month?

Answer 1

The correct answer is 20%

Step-by-step explanation:

Considering that I need to set up a weighted forecasting system over the three month period and the weights are represented as a percentage.

And the weights of the most recent months are the same, and each of those weights is double what the oldest month. we can exemplify the solution by this simple equation

40% + 40% + 20% = 100%

↑ ↑ ↑

Each percentage is one of three months.