1) Umbrella Corporation has the following sales figures (in $Millions) for the l
ID: 1139016 • Letter: 1
Question
1) Umbrella Corporation has the following sales figures (in $Millions) for the last 12 months.
The company wants to create a weighted moving average forecast of order k = 4 (i.e., a WMA(4)) for month 1 of the next year. They will use the weights of w1 = 0.142, w2 = 0.214, and w3 = 0.248 on months 9, 10, and 11, and the remainder for w4, the weight for month 12. Compute the WMA(4) forecast, taking all calculations to three decimal places.
t Month Sales 1 Jan 15.8 2 Feb 13.6 3 Mar 16.5 4 Apr 34.8 5 May 34 6 Jun 30.7 7 Jul 18.6 8 Aug 39.3 9 Sep 15.3 10 Oct 25.4 11 Nov 15.5 12 Dec 19.3Explanation / Answer
The weighted moving average forecast for month 1 of the next year = 0.142 x 15.3 + 0.214 x 25.4 + 0.248 x 15.5 + (1 - (0.142+0.214+0.248))) x 19.3
The weighted moving average forecast for month 1 of the next year = 19.095
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