In Q1, a firm sold 23,000 units of a particular product. In Q2, the firm sold 25,000 and in Q3 22,850 units were sold. Assume weights of 0.7 and 0.3 (descending for older data). What is the two period weighted moving average forecast for Q4?
A) 23,616
B) 23,525
C) 23,495
D) Forecast for Q4 cannot be determined from the information given

Question

Quizplus · Accepted Answer

To calculate the two period weighted moving average forecast for Q4, we need to use the weights of 0.7 and 0.3 for Q3 and Q2 respectively since Q1 is too far back.

Weighted Average = (0.7 x Q3 Sales) + (0.3 x Q2 Sales)

= (0.7 x 22,850) + (0.3 x 25,000)

= 16,001 + 7,500

= 23,501

Therefore, the closest answer is B) 23,525.

In Q1, a Firm Sold 23,000 Units of a Particular