A local restaurant has recorded the demand for bottled water in each of the last
ID: 387225 • Letter: A
Question
A local restaurant has recorded the demand for bottled water in each of the last 15 months of business. Use the recorded demand data below to develop three-period and four-period moving-average forecasts for bottles of water.
Round off all calculations to two decimal places. Maintaining two decimal places is required for all calculations.
What is the forecast for period 16 using the three-period weighted method?
(Weights are t=0.5, t-1=0.4 and t-2=0.1)
PeriodDemand Period Demand Period Demand 795 910 835 2 890 915 12 875 925 780 13 855 4 880 900 14 920 850 10 805 15 895Explanation / Answer
In weighted average, we multiply the given wight to each respective period and forecast it.
Forecast for period 16:
= (855*0.5) + (920*0.4) + (895*0.1)
= 427.5 + 368 + 89.5
= 885.
Hence the forecast for period 16 is 885
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