Question

13. Given the following historical data and weights of .5, .3, and .2, what is the three-period weighted moving average forecast for period 5? Period Value 1 138 2 142 3 148 4 144 a. 144.2 b. 144.8 c. 144.6 d. 143 e. 144

Answer 1

Answer:

b. 144.8

Step-by-step explanation:

When calculating the moving average estimate of an observation , each of the observations are usually computed with the same weighted . In some cases, it is  beneficial to assign different  weight on the observations  such that the observation closer to the time period being forecast, has higher weight.  This is refer to as weighted moving average technique. The sum of the individual weight in a weighted moving average technique must equal to 1.

The three-period weighted moving average forecast for period 5 = 144*0.5 + 148 *0.3 + 142 *0.2 =  144.8