Table 102
the Manager of a Pizza Shop Must Forecast Weekly

question 8

Multiple Choice

Table 10.2
The manager of a pizza shop must forecast weekly demand for special pizzas
so that he can order pizza shells weekly. Recent demand has been:
$$\begin{array} { | c | c | } \hline \text { Week } & \begin{array} { c } \text { No. Special } \\\text { Pizzas }\end{array} \\\hline 1 & 50 \\2 & 65 \\3 & 53 \\4 & 56 \\5 & 55 \\6 & 60 \\\hline\end{array}$$
-Demands for a newly developed salad bar at the Great Professional restaurant for the first six months of this year are shown below.
$$\begin{array} { | c | c | } \hline \text { Month } & \begin{array} { c } \text { Demand } \\\text { (Units) }\end{array} \\\hline \text { January } & 394 \\\text { February } & 365 \\\text { March } & 380 \\\text { April } & 439 \\\text { May } & 412 \\\text { June } & 467 \\\hline\end{array}$$
What is the forecast for July if the weighted moving average method is used? (Use weights of 0.5 for the most recent demand,0.3,and 0.2.)

• A) less than or equal to 432 units
• B) greater than 432 units but less than or equal to 442 units
• C) greater than 442 units but less than or equal to 452 units
• D) greater than 452

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Definitions:

Operating Leverage

Operating leverage is a measure of how revenue growth translates into growth in operating income, indicating the degree to which a firm can increase operating income by increasing revenue.

Degree of Operating Leverage

A financial ratio that measures how a change in sales volume will affect a company's operating income due to fixed and variable costs.

Temporary Workers

Employees hired for a specific period or to complete a specific task, often without the promise of long-term employment.

Financial Basis

In accounting, the underlying value or cost of an asset or investment used for tax reporting and calculating gains or losses.