Demands for a newly developed salad bar at the Great Professional restaurant for the first six months of this year are shown in the following table.What is the forecast for July if the 3-month weighted moving-average method is used? (Use weights of 0.5 for the most recent demand,0.3,and 0.2 for the oldest demand. )
A)fewer than or equal to 432 units
B)greater than 432 units but fewer than or equal to 442 units
C)greater than 442 units but fewer than or equal to 452 units
D)greater than 452

Question

Demands for a newly developed salad bar at the Great Professional restaurant for the first six months of this year are shown in the following table.What is the forecast for July if the 3-month weighted moving-average method is used? (Use weights of 0.5 for the most recent demand,0.3,and 0.2 for the oldest demand. ) 
A)fewer than or equal to 432 units 
B)greater than 432 units but fewer than or equal to 442 units 
C)greater than 442 units but fewer than or equal to 452 units 
D)greater than 452

Quizplus · Accepted Answer

To use the 3-month weighted moving-average method, we need to calculate the weighted averages for the last three months:

Weighted average for June = (0.5 x 450) + (0.3 x 440) + (0.2 x 430) = 445

Weighted average for May = (0.5 x 440) + (0.3 x 430) + (0.2 x 420) = 435

Weighted average for April = (0.5 x 430) + (0.3 x 420) + (0.2 x 410) = 425

Therefore, the forecast for July would be:

Forecast for July = (0.5 x 450) + (0.3 x 440) + (0.2 x 430) = 445

So the answer is C, which is greater than 442 units but fewer than or equal to 452 units.

Demands for a Newly Developed Salad Bar at the Great