Demand for a particular type of battery fluctuates from one week to the next. A

Question

Demand for a particular type of battery fluctuates from one week to the next. A study of the last six weeks provides the following demands (in dozens): 4, 5, 3, 2, 8, 10 (last week).

Forecast demand for the next week using a two-week moving average.

Forecast demand for the next week using a three-week moving average.

Which model is the better predictor?                            [ Select ]                       ["can not be compared since they are using different time amounts", "two week moving average", "three week moving average"]      

Explanation / Answer

1. Demand for the next week using a two-week moving average.

= (8+10)/2 = 9

2. Demand for the next week using a three-week moving average

= (2+8+10)/3

= 6.67

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