Question

A company wants to product a weighted moving average forecast for April with the weights 0.40, 0.35, and 0.25 assigned to March, February, and January, respectively. If the company had demands of 5,000 in January, 4,750 in February, and 5,200 in March, then April's forecast would be

Answer 1

4,992.50

Explanation:

The computation of the April forecast is shown below:-

April forecast = ((Weight of March × Demand of march) + (Weight of Feb × demand of Feb) + (Weight of Jan × Demand of Jan)] ÷ Total of weights

= (0.40 × 5,200 + 0.35 × 4,750 + 0.25 × 5,000)

= 4,992.50

Hence, the correct answer is 4,992.50 and we have applied the above formula.