Question

Weekly sales of bagels at the local bakery are as follows: Week Sales 1 400 2 370 3 420 4 380 5 410 6 430 7 400 8 What is the forecast for week 8 using weighted moving averages with the weights 0.6, 0.3, 0.1

Answer 1

410 bagels

Explanation:

If the weights of the moving averages are 0.6, 0.3, 0.1. We will determine the forecast for week 8 using week seven's sales with a 0.6 weight, week six's sales with a 0.3 weight, and week five's sales with a 0.1 weight:

`S_8=0.6S_7+0.3S_6+0.1S_5\\S_8=0.6*400+0.3*430+0.1*410\\S_8=410\ bagels`

The forecast for week 8 is 410 bagels.