A. Moving Average Example Mahmoudco Fizzy Drinks had the following demand schedu
ID: 343032 • Letter: A
Question
A. Moving Average Example Mahmoudco Fizzy Drinks had the following demand schedule for its products over the past months: Period Demand January 4800 February 5300 March 4900 April 4950 May 5250 June 5400 July 4870 August a. Compute a three-period moving average forecast given the demand for the products. Show your work. b. If actual demand for august was 5150, what would the moving average be for September? Show your work. B. Weighted Moving Average Example Given the following demand data for Mahmoudco Fizzy drinks, a. Compute a weighted average forecast for June using a weight of .35 for the most recent period, .25 for the next most recent, .10 for the next, and .30 for the next. b. If the actual demand for June is 5770, forecast the demand for July using the same weight as in part a. Period Demand Actual January 4760 February 4590 March 4680 April 4740 May 4490 June July
Explanation / Answer
Please find below table highlighting calculated forecast values for period April through September.
Month
Demand
Forecast
January
4800
February
5300
March
4900
Arpil
4950
5000.00
May
5250
5050.00
June
5400
5033.33
July
4870
5200.00
August
5150
5173.33
September
5140.00
The relevant formula for forecast value basis three period moving average us :
Ft = ( Dt-1 + Dt-2 + Dt-3 ) / 3
Ft = Forecast for period t
Dt-I, Dt-2 , Dt-3 = Demand for period t-1, t-2 and t-3 respectively
MOVING AVERAGE FORECAST FOR AUGUST = 5173.33
MOVING AVERAGE FORECAST FOR SEPTEMBER = 5140
Please find below forecasted values using 4 period weighted moving average :
Month
Demand
Forecast
January
4760
February
4590
March
4680
APRIL
4740
May
4490
4716.00
June
5770
4601.50
July
5020.00
The relevant formula for forecast value basis 4 period weighted moving average is :
Ft = 0.35.Dt-1 + 0.25.Dt-2 + 0.10.Dt-3 + 0.30.Dt-4
Ft = Forecast for period t
Dt-I, Dt-2 , Dt-3 = Demand for period t-1, t-2 ,t-3 and t-4 respectively
FORECAST FOR JUNE = 4601.50
FORECAST FOR JULY = 5020
Month
Demand
Forecast
January
4800
February
5300
March
4900
Arpil
4950
5000.00
May
5250
5050.00
June
5400
5033.33
July
4870
5200.00
August
5150
5173.33
September
5140.00
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