Question

A local restaurant has recorded the demand for bottled water in each of the last 15 months of business. Use the recorded demand data below to develop three-period and four-period moving-average forecasts for bottles of water. Round off all calculations to two decimal places. Maintaining two decimal places is required for all calculations.
Period Demand Period Demand Period Demand
1 4516 6 5267 11 5489
2 4769 7 5083 12 5942
3 4814 8 4689 13 5616
4 5958 9 5321 14 4785
5 5284 10 5475 15 4675

What is the forecast for period 16 using the three-period weighted method?
(Weights are t=0.5, t-1=0.4 and t-2=0.1)

(A) Less than or equal to 4500
(B) Greater than 4500 but less than or equal to 4600
(C) Greater than 4600 but less than or equal to 4700
(D) Greater than 5700 but less than or equal to 4800

Answer 1

Answer:

4813.10

Explanation:

the demand for bottled water for the last 15 months of business is as follows;

Period Demand

1 4516

2 4769

3 4814

4 5958

5 5284

6 5267

7 5083

8 4689

9 5321

10 5475

11 5489

12 5942

13 5616

14 4785

15 4675

the forecast for period 16 using the three-period weighted is

Weighted MA(3) = Ft₊₁ = wt₁(Dt) +wt₂(Dt₋₁) +wt₃(Dt₋₂

the weighting scheme to be used to forecast the period 16 are 0.5,0.4 and 0.1

Weighted MA(3) = F₁₆= 0.5(4675)+ 0.4(4785) +0.1(5616)   =2337.50+1914+561.60 =4813.10