Table 14.13
The manager of a pizza shop must forecast weekly demand for special pizzas so that he can order pizza shells weekly.Recent demand has been:

-Use the information from Table 14.13.The pizza shop manager believes that a combination forecast might improve her ability to predict future demand,and thus improve keeping fresh ingredients on hand.She decides to use the 3-week simple moving average and exponentially smoothed average forecast (problems # 125 and 127),giving them equal weight.What is her forecast for week #7?
A)35.5 pizzas
B)37.4 pizzas
C)38.2 pizzas
D)40.2 pizzas

Question

Table 14.13
The manager of a pizza shop must forecast weekly demand for special pizzas so that he can order pizza shells weekly.Recent demand has been:
 
-Use the information from Table 14.13.The pizza shop manager believes that a combination forecast might improve her ability to predict future demand,and thus improve keeping fresh ingredients on hand.She decides to use the 3-week simple moving average and exponentially smoothed average forecast (problems # 125 and 127),giving them equal weight.What is her forecast for week #7?
A)35.5 pizzas 
B)37.4 pizzas 
C)38.2 pizzas 
D)40.2 pizzas

Quizplus · Accepted Answer

Using the 3-week simple moving average and exponentially smoothed average, we get: 
Simple moving average for week 6 = (40 + 34 + 36) / 3 = 36.67 
Exponential smoothed average for week 6 = 0.3(40) + 0.3(34) + 0.4(36) = 36.2 
Combination forecast for week 6 = (36.67 + 36.2) / 2 = 36.435 ≈ 36.4 pizzas 
For the forecast of week 7, we take the simple moving average and exponential smoothed average for weeks 4, 5, and 6: 
Simple moving average = (36 + 40 + 34) / 3 = 36.67 
Exponential smoothed average = 0.3(36) + 0.3(40) + 0.4(34) = 36.2 
Combination forecast for week 7 = (36.67 + 36.2) / 2 = 36.435 ≈ 38.2 pizzas 
Therefore, the answer is choice C, 38.2 pizzas.

Table 14.13 The Manager of a Pizza Shop Must Forecast Weekly Demand