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Historical demand for a product is

DEMAND
January 19
February 18
March 22
April 19
May 23
June 22

Using a weighted moving average with weights of 0.50 (June), 0.30 (May), and 0.20 (April), find the July forecast.

User Inuart
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1 Answer

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Final answer:

The July forecast for the product is predicted to be approximately 22, calculated using a weighted moving average based on the historical demand from April, May, and June with respective weights of 0.20, 0.30, and 0.50.

Step-by-step explanation:

To find the July forecast for the product using a weighted moving average, you multiply each month's DEMAND by the respective weight and sum these products. The historical DEMAND for the months of April, May, and June are 19, 23, and 22 respectively. The weights are 0.20 (April), 0.30 (May), and 0.50 (June). Using these values, the weighted moving average is calculated as follows:

  • April DEMAND x Weight = 19 x 0.20 = 3.8
  • May DEMAND x Weight = 23 x 0.30 = 6.9
  • June DEMAND x Weight = 22 x 0.50 = 11.0

By adding these together we get the forecasted DEMAND for July:

3.8 (April) + 6.9 (May) + 11.0 (June) = 21.7

Therefore, the predicted July forecast using a weighted moving average is approximately 22 (rounding 21.7 to the nearest whole number).