Question

Using simple moving averages and the following time series data, respond to each of the items. Period Demand 1 130 2 122 3 121 4 116 5 141 6 105 7 116 8 118 9 142 10 125. What is the simple moving average for period 4?

1) 120
2) 116
3) 122
4) 125

Answer 1

The simple moving average for period 4 is found by summing up the demands for the first four periods and dividing by the number of periods. After calculating, the average is 122.25, which can be rounded to 122, making option 3) 122 the correct answer.

Step-by-step explanation:

To find the simple moving average for period 4 using the provided time series data, you calculate the average of the demands for periods 1, 2, 3, and 4. The formula for a simple moving average is the sum of the demands for a specified number of periods divided by the number of periods. So, let's calculate it:

1. Demand for Period 1: 130
2. Demand for Period 2: 122
3. Demand for Period 3: 121
4. Demand for Period 4: 116

The sum of these demands is 130 + 122 + 121 + 116 = 489. To get the average, divide this sum by the number of periods, which is 4: 489 / 4 = 122.25

Since we are looking for a whole number answer, we can round this to the nearest whole number, which is 122. Thus, option 3) 122 is the correct simple moving average for period 4.