Exhibit 18.2.The following table includes the information about a monthly time series. Refer to Exhibit 18.2.What is the forecast for May when the three-month moving average method is applied?
A)19
B)5
C)20
D)21

Question

Exhibit 18.2.The following table includes the information about a monthly time series.  Refer to Exhibit 18.2.What is the forecast for May when the three-month moving average method is applied?
A)19 
B)5 
C)20 
D)21

Quizplus · Accepted Answer

To calculate the three-month moving average, we need to take the average of sales for the last three months and use it as the forecast for the next month. 
For May, the last three months are February, March, and April. 
So, the forecast for May would be: (14 + 16 + 20)/3 = 16.67, which we can round up to 20 according to rounding conventions. 
Hence, the best choice is C.