The three-month moving average is calculated by adding up the demand for the past three months and dividing the sum by three.
To calculate the forecast for month four, we need to find the average of the demand over the past three months: 700, 750, and 900.
Step 1: Add up the demand for the past three months:
700 + 750 + 900 = 2350
Step 2: Divide the sum by three:
2350 / 3 = 783.33 (rounded to two decimal places)
Therefore, the forecast for month four, based on the three-month moving average, is approximately 783.33.
Keep in mind that the three-month moving average is a method used to smooth out fluctuations in data and provide a trend. It is important to note that this forecast may not accurately capture sudden changes or seasonal variations in demand.