Kim's Nail Salon uses a weighted moving average method to forecast demand. She assigns a weight of 5 to the previous month's demand, 3 to demand two months ago, and 2 to demand three months ago. If demand was 800 customers in April, 900 customers in May, 1,200 customers in June, and 2,000 customers in July, what should her forecast for August be?
A) 1,540
B) 910
C) 1,400
D) 1,210

Question

Quizplus · Accepted Answer

The forecast for August is calculated using the weighted moving average method with the given weights and demands for the previous three months (May, June, July). The calculation is as follows: [(5 * 2000) + (3 * 1200) + (2 * 900)] / (5+3+2) = (10000 + 3600 + 1800) / 10 = 15400 / 10 = 1540.

Kim's Nail Salon Uses a Weighted Moving Average Method to Forecast