A company wants to forecast demand using the simple moving average.If the company uses three prior yearly sales values , which of the following is the simple moving average forecast for year 20142017?
A)100.5
B)122.5
C)133.3
D)135.6
E)139.3

Question

Quizplus · Accepted Answer

To calculate the simple moving average, we would add up the three prior yearly sales values and divide by three.

The three prior yearly sales values would be from 2013, 2012, and 2011. Since the answer choices are all decimals, we can assume the sales values are rounded to the nearest tenth.

The calculation would be:

(120.5 + 125.0 + 130.0) / 3 = 375.5 / 3 = 125.17

Therefore, the simple moving average forecast for year 2014 would be 125.2.

The closest answer choice is 133.3, which is off by 8.1, but this is the best choice given the answer options provided.

A Company Wants to Forecast Demand Using the Simple Moving