Suppose that you are using the simple mean to make a forecast. This period's forecast was equal to 100 units, and it was based on 6 periods of demand. This period's actual demand was 86 units. What is your forecast for next period?
a) 98
b) 100
c) 93
d) 86
e) Not enough information is given to answer the question.
Answer: a) 98
Solution: 100 + 100 + 100 + 100 + 100 + 86 = 586/6 = 98