Given the following history, use a three-quarter moving average to forecast the

Question

Given the following history, use a three-quarter moving average to forecast the demand for the third quarter of this year. Note, the 1st quarter is Jan, Feb, and Mar; 2nd quarter Apr, May, Jun; 3rd quarter Jul, Aug, Sep; and 4th quarter Oct, Nov, Dec JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC Last year 140 165 175 215 225 240 190 180 170 240 265 290 This year 165 175 190 230 265 235 Calculate the Forecast for the 3rd quarter of this year using a three-quarter moving average. Forecast for the third quarter

Explanation / Answer

Solution:

Using the three-quarter moving average, the forecast for the third quarter of this year can be calculated as below:

Forecast for the third quarter = (Total demand for 2nd quarter of this year + Total demand for 1st quarter of this year + Total demand for 4th quarter of last year) / 3

Forecast for the third quarter = [(235 + 265 + 230) + (190 + 175 + 165) + (290 + 265 + 240)] / 3

Forecast for the third quarter = 685

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