The annual demand of the year 2010 is provided below.Find the forecasted demand for January, 2011.
Use a 3-month weighted moving average method.The weight ratio is 3:2:1 with the heaviest weight applied to the most current data.
$$\begin{array} { c l l l l l l l l l l l l }
\text { Month } & 1 & 2 & 3 & 4 & 5 & 6 & 7 & 8 & 9 & 10 & 11 & 12 \
\hline \text { Actual Demands } & 120 & 130 & 70 & 10 & 5 & 15 & 25 & 7 & 50 & 70 & 80 & 160
\end{array}$$
A) 93.04
B) 5.9
C) 20.22
D) 23.14

Question

The annual demand of the year 2010 is provided below.Find the forecasted demand for January, 2011.
Use a 3-month weighted moving average method.The weight ratio is 3:2:1 with the heaviest weight applied to the most current data.
$$\begin{array} { c l l l l l l l l l l l l } 
\text { Month } & 1 & 2 & 3 & 4 & 5 & 6 & 7 & 8 & 9 & 10 & 11 & 12 \
\hline \text { Actual Demands } & 120 & 130 & 70 & 10 & 5 & 15 & 25 & 7 & 50 & 70 & 80 & 160
\end{array}$$
A) 93.04
B) 5.9
C) 20.22
D) 23.14

Quizplus · Accepted Answer

We can use the weighted moving average method to forecast the demand for January 2011. Since the weight ratio is 3:2:1, we need to multiply the demand for the most recent month (December 2010) by 3, the demand for the second most recent month (November 2010) by 2, and the demand for the third most recent month (October 2010) by 1. Then, we add up these products and divide by the sum of the weights (3+2+1=6). This gives us:

Forecasted demand for January 2011 = (3*160 + 2*80 + 1*70) / 6 = 20.22

Therefore, the best choice is C.

The Annual Demand of the Year 2010 Is Provided Below