The following table shows the data for the sales of a new music album at a store for 4 consecutive months. Find the forecast for the next month using a 3-month moving average.
$\begin{array} { | l | l | l | l | l | }
\hline \text { Month } & 1 & 2 & 3 & 4 \
\hline \text { Sales } & 112 & 105 & 125 & 118 \
\hline
\end{array}$
A) The forecast for the next month is more than 90 but less than or equal to 100.
B) The forecast for the next month is more than 100 but less than or equal to 110.
C) The forecast for the next month is more than 110 but less than or equal to 120.
D) The forecast for the next month is more than 120 but less than or equal to 130.

Question

The following table shows the data for the sales of a new music album at a store for 4 consecutive months. Find the forecast for the next month using a 3-month moving average. 
$\begin{array} { | l | l | l | l | l | } 
\hline \text { Month } & 1 & 2 & 3 & 4 \
\hline \text { Sales } & 112 & 105 & 125 & 118 \
\hline
\end{array}$
A) The forecast for the next month is more than 90 but less than or equal to 100.
B) The forecast for the next month is more than 100 but less than or equal to 110.
C) The forecast for the next month is more than 110 but less than or equal to 120.
D) The forecast for the next month is more than 120 but less than or equal to 130.

Quizplus · Accepted Answer

To find the 3-month moving average for the fourth month, we need to take the average of the sales in the previous three months.

3-month moving average for Month 4 = (112+105+125)/3 = 114

Therefore, the forecast for the next month (Month 5) would be the 3-month moving average of the previous three months (i.e., Month 2, Month 3, and Month 4).

3-month moving average for Month 5 = (105+125+118)/3 = 116

Since the forecast for the next month (Month 5) is between 110 and 120, the best choice is C, which states that the forecast for the next month is more than 110 but less than or equal to 120.

The Following Table Shows the Data for the Sales of a New