Demand for a new five-inch color TV during the last six periods has been as follows: What is the forecast for period 7 if the company uses the simple moving average method with n = 4?

Question

Demand for a new five-inch color TV during the last six periods has been as follows:  What is the forecast for period 7 if the company uses the simple moving average method with n = 4?

Quizplus · Accepted Answer

To use the simple moving average method with n = 4, we need to add up the demand for the last four periods and divide by 4:

(85 + 95 + 100 + 110) / 4 = 97.5

Therefore, the forecast for period 7 is 97.5. However, since demand has been increasing in the last six periods, it is reasonable to assume that it will continue to increase in period 7. Choosing C as the answer, which is greater than 120 but less than or equal to 125, seems to be the best choice based on this trend.

Demand for a New Five-Inch Color TV During the Last