Question

Your sales for January through April were 136,139,122, and 139. 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

To forecast the sales for May using a three weighted month moving average with weights of 3, 2, and 1, the resulting prediction is 136.2 (to one decimal place) using the sales data from the months of March and April.

Step-by-step explanation:

To forecast May sales using a three weighted month moving average, we assign weights to the three most recent months' sales data, which are March (122), April (139), and May (to be forecasted). The weights for the three months are 1, 2, and 3 respectively, with the highest weight given to the most recent month, April.

Therefore, the forecast for May (FMay) is computed as follows:
FMay = (Weight for March × March sales) + (Weight for April × April sales) + (Weight for May × May sales)

Plugging the sales numbers and weights in, we get:
FMay = (1 × 122) + (2 × 139) + (3 × 139)

FMay is therefore calculated as:
FMay = 122 + 278 + 417 = 817

However, since these are weighted sums, we must divide by the total of the weights to get the average: (1+2+3) = 6. Thus, FMay = 817 / 6, which gives us FMay = 136.2 (to one decimal place).