The manager at a convenience store wants to forecast sales for an item THIS WEEK
ID: 363991 • Letter: T
Question
The manager at a convenience store wants to forecast sales for an item THIS WEEK based on the following historical data:
WEEK
ACTUAL SALES
(Number of units sold)
Six weeks ago
120
Five weeks ago
240
Four weeks ago
360
Three weeks ago
480
Two weeks ago
600
One week ago
720
THIS WEEK
NOT KNOWN
Determine the sales forecast for THIS WEEK using a 3-week weighted moving average with weights of 5, 2, and 1 for one week ago, two weeks ago, and three weeks ago, respectively. (Hint: the heavier weights are applied to the more recent time periods.)
WEEK
ACTUAL SALES
(Number of units sold)
Six weeks ago
120
Five weeks ago
240
Four weeks ago
360
Three weeks ago
480
Two weeks ago
600
One week ago
720
THIS WEEK
NOT KNOWN
Explanation / Answer
3-week Weighted moving average for THIS WEEK = (Three weeks ago*weight + Two weeks ago*weight + One week ago*weight)/(Weight1 + Weight2 + Weight3)
= (480*1 + 600*2 + 720*5)/(1+2+5) = 660
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