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25 July, 13:38

Suppose that you are using the simple mean to make a forecast. This period's forecast was equal to 1000 units, and it was based on 99 periods of demand. This period's actual demand was 0 units. What is your forecast for next period?

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Answers (2)
  1. 25 July, 16:24
    0
    Next period forecast is 990 units

    Explanation:

    The next period forecast van be computed thus:

    this period forecast based on 99 periods

    this period forecast figure was 1000 units

    This period actual demand was 0 units

    note the that the next period forecast would be based on 100 periods (current forecast periods plus 1)

    100 periods * next period forecast=this period forecast*99 periods+actual demand this period

    100 * next period forecast=1000*99+0

    next period forecast = (1000*99+0) / 100

    next period forecast = 990 units

    This fact that this period actual demand was zero has made the next forecast to reduce viz-a-viz this period forecast of 1000 units
  2. 25 July, 17:35
    0
    Next period forecast units = 990 units

    Explanation:

    Simple Mean formula:

    ⇒ Mean = Sum of observations

    No. of observations

    ⇒ 1000 = Sum of observations

    99

    ⇒ Sum of observations = 1000 x 99

    ⇒ Sum of observations = 99,000

    The next period actual demand was 0 units. Now,

    ⇒ Sum of observations = 99,000 + 0

    ⇒ Sum of observations = 99,000

    Forecast next period units using simple mean:

    ⇒ Mean = 99,000

    100

    ⇒ Mean = 990 units
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