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

question 161

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, 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:

Exponential Distribution

A probability distribution used to model the time between events in a Poisson process, describing the times between events in a continuous but rare occurrence.

Poisson Probability

The probability of a given number of events happening in a fixed interval of time or space if these events occur with a known constant mean rate and independently of the time since the last event.

Successive Arrivals

The sequence in which entities arrive one after another, often analyzed in queue theory and time-series analysis.

Continuous Random Variables

Variables that can take an infinite number of values within a given range.