Budgeting and Forecasting HW Question

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rfpbcrgn92

Business Finance

Description

Using the table “Computer Sales Time Series”, calculate the forecast for computer sales (in thousands) for Week 13 using a three day weighted moving average. Use a weight of .40 for the most recent observation, .35 for the second most recent, and .25 for the third most recent.  

 

Computer Sales Time Series

Week

Sales (in thousands)

1

2

2

4

3

5

4

3

5

6

6

7

7

5

8

8

9

4

10

2

11

3

12

5


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Explanation & Answer

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Using three day weighted moving average,

 To find value for 13th week, we will use values of 12th, 11th and 10th week

Forecast for computer sales in 13th week =( (0.4*5) + (0.35*3) + (0.25*2) )/(0.4+0.35+0.25)

                                                     = (2 + 1.05 + 0.5) / 1

Forecast for computer sales in 13th week = 3.55  (sales in thousands)

                          


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