Table 10.7
$$\begin{array} { | c | c | }
\hline \text { Month } & \begin{array} { c }
\text { Units Sold } \
( 00 )
\end{array} \
\hline 1 & 150 \
2 & 145 \
3 & 160 \
4 & 180 \
5 & 220 \
\hline
\end{array}$$
-Use the information in Table 10.7.The forecast for month 4 is
A) less than or equal to 140 units.
B) greater than 140 but less than or equal to 150
C) greater than 150 but less than or equal to 160 units.
D) greater than 160 units.

Question

Table 10.7
 $$\begin{array} { | c | c | } 
\hline \text { Month } & \begin{array} { c } 
\text { Units Sold } \
( 00 )
\end{array} \
\hline 1 & 150 \
2 & 145 \
3 & 160 \
4 & 180 \
5 & 220 \
\hline
\end{array}$$
-Use the information in Table 10.7.The forecast for month 4 is
A) less than or equal to 140 units.
B) greater than 140 but less than or equal to 150
C) greater than 150 but less than or equal to 160 units.
D) greater than 160 units.

Quizplus · Accepted Answer

To find a forecast for month 4, we can use either a simple moving average or exponential smoothing method. Here, we will use a simple moving average with a window of 3 months since we have data for only 3 previous months. 
Forecast for month 4=(Units sold in month 3+units sold in month 2+units sold in month 1) /3
=(160+145+150)/3
=455/3
=151.67
Thus, the forecast for month 4 is greater than 150 but less than or equal to 160 units, which is choice C.

Table 107 -Use the Information in Table 10