Data collected on the yearly demand for 50-pound bags of fertilizer at Wallace G

Question

Data collected on the yearly demand for 50-pound bags of fertilizer at Wallace Garden Supply are shown in the following table. Develop a 3-year moving average to forecast sales. Then estimate demand again with a weighted moving average in which sales in the most recent year are given a weight of 2 and sales in the other 2 years are each given a weight of 1. Which method do you think is best? Please show your work.

DEMAND FOR FERTILIZER

YEAR         (1,OOOS OFBAGS)

1                    4

2                    6

3                    4

4                    5

5                  10

6                    8

7                    7

8                    9

9                  12

10                14

11                15

Explanation / Answer

Weighted Moving average gives the is the best forecast.

Year Bags 3-Yrs Moving Average Weighted Moving Average 1 4 - 2 6 (4+6+4)=14/3=4.66 (4*1+6*1+4*2)=18/4=4.5 3 4 (6+4+5)=15/3=5 (6*1+4*1+5*2)=20/4=5 4 5 (4+5+10)=19/3=6.33 (4*1+5*1+10*2)=29/4=7.25 5 10 (5+10+8)=23/3=7.66 (5*1+10*1+8*2)=31/4=7.75 6 8 (10+8+7)=25/3=8.33 (10*1+8*1+7*2)=32/4=8 7 7 (8+7+9)=24/3=8 (8*1+7*1+9*2)=33/4=8.25 8 9 (7+9+12)=28/3=9.33 (7*1+9*1+12*2)=40/4=10 9 12 (9+12+14)=35/3=11.66 (9*1+12*1+14*2)=49/4=12.25 10 14 (12+14+15)=41/3=13.66 (12*1+14*1+15*2)=56/4=14 11 15 -

Related Questions

Navigate

• Browse (All)
• Browse D
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.