Question

g ational Scan, Inc., sells radio frequency inventory tags. Monthly sales for a five-month period were as follows: MonthSales (units) Feb.427 Mar.376 Apr.435 May465 Jun.315 What is your forecast for July sales volume using a three-month moving average

Answer 1

The forecasted sales for July using a three-month moving average is 405

What is Forecasting ?

Forecasting is a very useful future analysis technique for demand and sales data for different units and processes. This method is used to estimate future sales and demand. It is also useful in trend analysis to evaluate future trends and forecasting.

The formula to compute three-month moving average MA(3) to forecast sales for the $n^{th}$ period is shown below:

$Forecastperiod(n)$ $=$ $\frac{Y_{n-3} + Y_{n- 2} + Y_{n- 1}}{3}$

                       July =  $\frac{435 + 465 + 315 }{3}$

                      July = $\frac{1,215}{3}$

                      July = 405

Thus , the forecasted sales for July is 405.

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