Question

A supermarket uses a four-week moving average to predict future sales of milk. Sales data (in gallons) over the past ten weeks are shown below.

          Week     Sales             Week      Sales

            1          8,000             6        10,000

            2          8,000             7        8,000

            3          13,500             8        11,000

            4          10,500             9        9,000

            5          12,000             10        12,000

On the basis of these data, what would be the store’s forecast for week 11?

Select one:

a. 12,000

b. 11,000

c. 9,000

d. 10,000

Answer 1

d. 10000

Using the four week moving average method, the forecast would be:

F(11) = {Actual(7) + Actual(8) + Actual(9) + Actual(10)}/4

= (8000 + 11000 + 9000 + 12000)/4

= 10000