The Hughes Supply Company uses an inventory management method to determine the m
ID: 3173827 • Letter: T
Question
The Hughes Supply Company uses an inventory management method to determine the monthly demands for various products. The demand values for the 12 months of 2015 for one electrical fixture are shown below. The forecasted demand for January 2016 using a five-month moving average is
Month
Demand
January
February
March
April
May
June
July
August
September
October
November
December
205
251
304
284
352
300
241
284
312
289
385
256
Select one:
a. 310.5
b. 320.5
c. 305.2
d. 205
e. 279.2
Month
Demand
January
February
March
April
May
June
July
August
September
October
November
December
205
251
304
284
352
300
241
284
312
289
385
256
Explanation / Answer
The forecasted demand for January 2016 using a five-month moving average is 305.2
Using, 5 years moving average the forecase of 2016 January is calculated as below
Adding up the last 5 months demand and dividng the same by 5 will give us the demand for Jan 2016
That is 284+312+289+385+256/5 = 1526/5 = 305.2
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