The following table shows the data for the sales of tennis rackets at a store for 4 consecutive months. Find the forecast error in month 4 using a 3-month moving average.
$\begin{array} { | l | l | l | l | l | }
\hline \text { Month } & 1 & 2 & 3 & 4 \
\hline \text { Sales } & 80 & 95 & 125 & 110 \
\hline
\end{array}$
A) The forecast error in month 4 is less than or equal to 5.
B) The forecast error in month 4 is more than 5 but less than or equal to 10.
C) The forecast error in month 4 is more than 10 but less than or equal to 15.
D) The forecast error in month 4 is more than 15.

Question

The following table shows the data for the sales of tennis rackets at a store for 4 consecutive months. Find the forecast error in month 4 using a 3-month moving average. 
$\begin{array} { | l | l | l | l | l | } 
\hline \text { Month } & 1 & 2 & 3 & 4 \
\hline \text { Sales } & 80 & 95 & 125 & 110 \
\hline
\end{array}$
A) The forecast error in month 4 is less than or equal to 5.
B) The forecast error in month 4 is more than 5 but less than or equal to 10.
C) The forecast error in month 4 is more than 10 but less than or equal to 15.
D) The forecast error in month 4 is more than 15.

Quizplus · Accepted Answer

To calculate the forecast for month 4 using a 3-month moving average, we average the sales from months 1, 2, and 3: $(80 + 95 + 125) / 3 = 300 / 3 = 100$. The actual sales in month 4 are 110, so the forecast error is $110 - 100 = 10$, which is more than 5 but less than or equal to 10.

The Following Table Shows the Data for the Sales of Tennis