What would be a 3-month weighted moving average forecast for July, using weights of 40% for the most recent month, 30% for the month preceding the most recent month, and 30% for the month preceding that one?

A firm has the following order history over the last 6 months.

January 120
February 95
March 100
April 75
May 100
June 50

What would be a 3-month weighted moving average forecast for July, using weights of 40% for the most recent month, 30% for the month preceding the most recent month, and 30% for the month preceding that one?



a) 75
b) 72.5
c) 50
d) 90
e) 106.5


Answer: b) 72.5

Solution:
Ct At CtAt
April .3 75 22.5
May .3 100 30
June .4 50 20
Forecast 72.5


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