Suppose a Four-Period Weighted Average Is Being Used to Forecast

question 33

Multiple Choice

Suppose a four-period weighted average is being used to forecast demand. Weights for the periods are as follows: w _t-4 = 0.1, w _t-3 = 0.2, w _t-2 = 0.3 and w _t-1 = 0.4. Demand observed in the previous four periods was as follows: A _t-4 = 380, A _t-3 = 410, A _t-2 = 390, and A _t-1 = 400. What will be the demand forecast for period t?

• A)402
• B)397
• C)399
• D)393
• E)403

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Definitions:

Direct Labor

The wages and salaries paid to workers who are directly involved in the production of goods or the provision of services.

Variable Manufacturing Overhead

The portion of manufacturing overhead costs that varies with production volume, such as utility costs in a factory.

Product Costs

Costs directly associated with the manufacturing of goods, including direct materials, direct labor, and manufacturing overhead.