One technique used in business forecasting calculates a weighted moving average of observations from a fixed number of recent time periods to forecast what will happen next. In such an approach, more recent observations are commonly given a greater weight than older ones. Suppose you are using a three-month weighted moving average to estimate product demand for May, assigning weights of 5 to April demand, 3 to March demand, and 2 to February demand. If April demand was 150 units, March demand was 180 units, and February demand was 130 units, compute the weighted average that would be used to forecast May demand.

  • CreatedJuly 16, 2015
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