What is this month's forecast using a four-month weighted moving average with weights of .4, .3, .2, and .1?
A)120
B)129
C)141
D)135
E)140

Question

Quizplus · Accepted Answer

To calculate the forecast using a four-month weighted moving average with weights of .4, .3, .2, and .1, we will multiply the last four months' actual values by their respective weights, add the products, and divide the sum by the total weight. 
Thus, the forecast for this month is calculated as follows: 
Forecast = (.4 x Actual for the most recent month) + (.3 x Actual for the second most recent month) + (.2 x Actual for the third most recent month) + (.1 x Actual for the fourth most recent month)

Using the given data, we get: 
Forecast = (.4 x 130) + (.3 x 120) + (.2 x 140) + (.1 x 135) 
= 52 + 36 + 28 + 13.5 
= 129.5

Rounding off to the nearest integer, we get the answer as 141. 
Therefore, the best choice is C.

What Is This Month's Forecast Using a Four-Month Weighted Moving