Asked by Siqian Chang on Jun 19, 2024
Verified
John's House of Pancakes uses a weighted moving average method to forecast pancake sales. It assigns a weight of 5 to the previous month's demand, 3 to demand two months ago, and 1 to demand three months ago. If sales amounted to 1000 pancakes in May, 2200 pancakes in June, and 3000 pancakes in July, what should be the forecast for August?
A) 2400
B) 2511
C) 2067
D) 3767
E) 1622
Weighted Moving Average Method
A forecasting technique that assigns different weights to historical data points, giving more importance to more recent data.
Pancake Sales
The commercial activity of selling pancakes, which can serve as an indicator of consumer interest or market trends in particular food products.
Forecast for August
A prediction or estimation of future events or conditions specific to the month of August, often used in sales, weather, or production planning.
- Gain an insight into the attributes and applications of time-series analysis within the realm of forecasting.
Verified Answer
August forecast = (5 x July demand) + (3 x June demand) + (1 x May demand) / (5 + 3 + 1)
= (5 x 3000) + (3 x 2200) + (1 x 1000) / 9
= 15,000 + 6,600 + 1,000 / 9
= 22,600 / 9
= 2511
Therefore, the forecast for August is 2511 pancakes. The answer is B.
Learning Objectives
- Gain an insight into the attributes and applications of time-series analysis within the realm of forecasting.
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