Question

Your sales for January through April were 140, 145, 120, and 133. Using a three weighted month moving average with weights of 3,2 , and 1 (with the highest weight on the most recent month), provide a forecast for May. Answer to one decimal place.

Answer 1

Using a three-month weighted moving average with weights of 3, 2, and 1, the forecast for May sales is 130.7.

Step-by-step explanation:

To calculate the forecast for May using a three-month weighted moving average, we take the sales figures for the three most recent months, which are February through April, and assign weights to them. For February (145), we use a weight of 1; for March (120), we use a weight of 2; and for April (133), we use the highest weight of 3. Once weighted, we add these products together and divide by the sum of the weights (1+2+3=6) to get the forecasted sales.

The forecast calculation is:

\(\frac{(145 \times 1) + (120 \times 2) + (133 \times 3)}{6}\) = \(\frac{145 + 240 + 399}{6}\) = \(\frac{784}{6}\) = 130.7

Therefore, the forecast for May sales, using a three weighted month moving average, is 130.7 (to one decimal place).