Table 10.8
A manager wants to forecast the monthly demand
for a machine the company produces.
$$\begin{array} { | c | c | }
\hline \text { Month } & \begin{array} { c }
\text { No. Machines } \
\text { Sold }
\end{array} \
\hline 1 & 50 \
2 & 65 \
3 & 52 \
4 & 56 \
5 & 55 \
6 & 60 \
\hline
\end{array}$$
-Use the information in Table 10.8.Calculate the MAD for months 4 through 6 for the weighted moving average forecasts.The weights are 0.50,0.30,and 0.20,where 0.50 refers to the most recent demand.
A) less than or equal to 2
B) greater than 2 but less than or equal to 3
C) greater than 3 but less than or equal to 4
D) greater than 4

Question

Table 10.8
A manager wants to forecast the monthly demand
for a machine the company produces.
 $$\begin{array} { | c | c | } 
\hline \text { Month } & \begin{array} { c } 
\text { No. Machines } \
\text { Sold }
\end{array} \
\hline 1 & 50 \
2 & 65 \
3 & 52 \
4 & 56 \
5 & 55 \
6 & 60 \
\hline
\end{array}$$
-Use the information in Table 10.8.Calculate the MAD for months 4 through 6 for the weighted moving average forecasts.The weights are 0.50,0.30,and 0.20,where 0.50 refers to the most recent demand.
A) less than or equal to 2
B) greater than 2 but less than or equal to 3
C) greater than 3 but less than or equal to 4
D) greater than 4

Quizplus · Accepted Answer

To calculate the weighted moving average (WMA), we need to multiply the demand for each month by the corresponding weight, sum these products, and then divide by the sum of the weights. The WMA for month 4 using the given weights is:

WMA4 = (0.5 x 52) + (0.3 x 65) + (0.2 x 50) = 26 + 19.5 + 10 = 55.5

Similarly, we can calculate the WMAs for months 5 and 6:

WMA5 = (0.5 x 56) + (0.3 x 52) + (0.2 x 65) = 28 + 15.6 + 13 = 56.6
WMA6 = (0.5 x 55) + (0.3 x 56) + (0.2 x 52) = 27.5 + 16.8 + 10.4 = 54.7

Now we can calculate the MAD for months 4 through 6 by taking the absolute difference between the actual demand and the WMA, and then averaging these differences:

MAD = (|56 - 55.5| + |55 - 56.6| + |60 - 54.7|) / 3 = 0.5 + 1.6 + 5.3 / 3 = 7.4 / 3 = 2.47

Since the MAD is greater than 2 but less than or equal to 3, the best choice is B.

Table 108 a Manager Wants to Forecast the Monthly Demand for

Table 108
a Manager Wants to Forecast the Monthly Demand
for