Question

Daily demand for newspapers for the last 10 days has been as follows: 12, 13, 16, 15, 12, 18, 14, 12, 13, 15 (listed from oldest to most recent).

Forecast sales for the next day using a three-day weighted moving average where the weights are 3, 1, and 1 (the highest weight is for the most recent number).


a. 70.0

b. 14.0

c. 13.0

d. 28.0

e. 12.8

Answer 1

b. 14.0

Step-by-step explanation:

The computation of the forecast sales by using the three-day weighted moving average is shown below:

= Daily demand ÷ sum of weightage

where,

Daily demand would be

= 12 × 1 + 13 × 1 + 15 × 3

= 12 + 13 + 45

= 70

And, the sum weightage would be

= 3 + 1 + 1

= 5

So, the forecasted sales would be

= 70 ÷ 5

= 14

Simply we take the latest annual demand after considering the weightage and then divided it by the weightage sum