Question

Assume that your stock of sales merchandise is maintained based on the forecast demand. If the distributor's sales personnel call on the first day of each month, compute your forecast sales by each of the three methods requested here. ACTUAL June 135 July 170 August 200 a. Using a simple three-month moving average, what is the forecast for September? (Round your answer to 2 decimal places.) b. Using a weighted moving average, what is the forecast for September with weights of 0.20, 0.30, and 0.50 for June, July, and August, respectively? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Answer 1

Simple 3 month moving average = 168.33

Weighted moving average = 178

Step-by-step explanation:

a) Simple 3 month moving average = (W1+W2+W3) / 3

Simple 3 month moving average = (135 + 170 + 200) / 3

Simple 3 month moving average = 168.33

b. Weighted moving average = ((W1 * D1) + (W2 * D2) + (W3 * D3)

Weighted moving average = 135*0.20 + 170*0.30 + 200*0.50

Weighted moving average = 27 + 51 + 100

Weighted moving average = 178