The data for the number of hand-held gaming devices sold for the past 5 weeks are 15 units, 20 units, 25 units, 30 units, and 17 units respectively. The time series appears to be relatively stable, without trend, seasonal, or cyclical effects; thus, a moving average model would be appropriate. Setting k = 3 the three-period moving average forecast for week 6 is .
A) 20 units
B) 24 units
C) 30 units
D) 17 units

Question

Quizplus · Accepted Answer

To calculate the three-period moving average forecast, we add up the sales for the previous three weeks and divide by 3:

(15+20+25)/3 = 20 units

Then we move one week ahead and recalculate using the sales from weeks 2, 3, and 4:

(20+25+30)/3 = 25 units

Finally, we move ahead to week 6 and calculate using the sales from weeks 3, 4, and 5:

(25+30+17)/3 = 24 units

Therefore, the three-period moving average forecast for week 6 is 24 units, which corresponds to answer choice B.

The Data for the Number of Hand-Held Gaming Devices Sold