Ask Question
29 October, 10:05

Suppose a three-period weighted average is being used to forecast demand. Weights for the periods are as follows:

wt-3 = 0.2, wt-2 = 0.3 and wt-1 = 0.5.

Demand observed in the previous three periods was as follows:

At-3 = 2,200, At-2 = 1,950, At-1 = 2,050.

What will be the demand forecast for period t?

A) 2,000 B) 2,095 C) 1,980 D) 2,050 E) 1,875

+1
Answers (1)
  1. 29 October, 14:03
    0
    D

    Explanation:

    Demand forecasting is being able to predict the future demand of a firms product. We calculate this by multiplying the weights of each of the period by its demand observed in the previous period and adding them together

    To calculate the demand forecast for period t in this question;

    (wt-3 * At-3) + (wt-2 * At-2) + (wt-1 * At-1)

    = (0.2 * 2200) + (0.3 * 1950) + (0.5 * 2050)

    = 440 + 585 + 1025

    = 2050.

    Therefore the correct answer is D.

    2050 is the demand forecast for period t.
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “Suppose a three-period weighted average is being used to forecast demand. Weights for the periods are as follows: wt-3 = 0.2, wt-2 = 0.3 ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers