Using the data shown below, the forecast for week 5 using a 3-period moving average model is:
A)200
B)155
C)152
D)158

Question

Using the data shown below, the forecast for week 5 using a 3-period moving average model is: 
A)200 
B)155 
C)152 
D)158

Quizplus · Accepted Answer

To use a 3-period moving average model, we need to average the demand for the previous 3 periods to forecast the next period.

Week 2 forecast = (100 + 110 + 120)/3 = 110 
Week 3 forecast = (110 + 120 + 130)/3 = 120 
Week 4 forecast = (120 + 130 + 140)/3 = 130

Therefore, the forecast for week 5 using a 3-period moving average model is (130+ 120 + 110)/3 = 120.

The closest option to 120 is C (152). None of the other options are close to the calculated forecast, so they can be eliminated as choices.

Using the Data Shown Below, the Forecast for Week 5