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?

Question

Emmett

Business

17 February, 11:35

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?

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Harold Mcneil · Answer 1

To calculate for the demand for August, we should consider that the formula should be in the form:

Demand for August = Summation (Weight ratio * Demand)

Where: weight ratio = weight of that month / total weight of 3 months

Demand for August = (5/9) * 3000 + (3/9) * 2200 + (1/9) * 1000

Demand for August = 2511