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

(C) 72.5

Step-by-step 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