Sales Forecast Using Weighted Moving Average
What is the forecast for the fourth quarter using a three-quarter, weighted moving average?
Develop a forecast for the fourth quarter using a three-quarter, weighted moving average. Weight the most recent quarter .5, the second most recent .25, and the third .25.
The forecast for the fourth quarter using a three-quarter, weighted moving average is:
The weighted moving average for the fourth quarter is 344.00. To determine the value, one needs to compute the mean of the previous three quarters, while considering the given proportions. The quarter that holds the highest significance in the analysis is the most recent one, followed by the second most recent and then the third most recent quarter.
In this case, the weighted moving average for the fourth quarter is calculated by assigning weights to each of the three previous quarters. The most recent quarter is given a weight of 0.5, the second most recent quarter is given a weight of 0.25, and the third most recent quarter is also given a weight of 0.25. By using these weights, the forecast for the fourth quarter is determined to be 344.00 units.
This method of forecasting helps to smooth out any fluctuations in sales data and provides a more stable prediction for future sales. It takes into account the most recent trends in sales while also considering the patterns from the previous quarters.
It's important to note that this forecast is an estimate and may not be completely accurate. Various factors can impact actual sales numbers, so it's always wise to monitor sales data regularly and adjust forecasts as needed.