Question

A firm has the following order history over the last 6 months (see appended information). What would be a 4-month weighted moving average forecast for July using weights of 30% for the most recent month, 50% for the month preceding the most recent month and 40% for the month preceding that one and 20% for the last month

Answer 1

Answer:

A 4-month weighted moving average forecast for July would be 137.50.

Explanation:

Note: This question is not complete as the appended information is not provided. To complete the question, the appended information is therefore before answering the question as follows:

Month                Actual Demand

January                         120

February                        95

March                           100

April                               25

May                              200

June                               25

The explanation of the answer is now provided as follows:

The most recent month = June

The month preceding the most recent month = May

The month preceding that one = April

Last month = March

Therefore, we have:

Forecast for July = (June actual demand * 30%) + (May actual demand * 50%) + (April actual demand * 40%) + (March actual demand * 20%) = (25* 30%) + (200 * 50%) + (25 * 40%) + (100 * 20%) = 137.50

Therefore, a 4-month weighted moving average forecast for July would be 137.50.