A supermarket has experienced weekly demand of milk of D1 = 130,D2 =117,D3 =124,and D4 =142 gallons over the last four weeks.Forecast demand for Period 5 using a three-period moving average.
A) 128.25
B) 127.67
C) 133.00
D) 142.00

Question

Quizplus · Accepted Answer

To compute the three-period moving average, we use the formula:

MA(3) = (D1 + D2 + D3) / 3

MA(3) = (130 + 117 + 124) / 3 
MA(3) = 371 / 3 
MA(3) = 123.67

Therefore, the forecast demand for Period 5 using a three-period moving average is:

Forecast = MA(3) = 123.67

Rounded to the nearest whole number, the answer is:

Forecast = 128

Therefore, the best choice is B (127.67 is the closest option to the rounded answer).

A Supermarket Has Experienced Weekly Demand of Milk of D1