Question

A company wants to forecast demand using the simple moving average. If the company uses four prior yearly sales values (i.e., year 2010 = 100, year 2011 = 120, year 2012 = 140, and year 2013 = 210), which of the following is the simple moving average forecast for year 2014?A. 142.5B.140.0C.155.0D.145.5E.100.5

Answer 1

Answer: Option (A) is correct.

Explanation:

Given that,

Four prior year sales value:

year 2010 = 100

year 2011 = 120

year 2012 = 140

year 2013 = 210

Therefore,

Simple moving average forecast for year 2014:

$=\frac{Year\ 2010\ + Year\ 2011\ + Year\ 2012\ + Year\ 2013}{4}$

$=\frac{100 + 120 + 140 + 210}{4}$

$=\frac{570}{4}$

= 142.5