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

question 106

Multiple Choice

Suppose a three-period weighted average is being used to forecast demand. Weights for the periods are as follows: w_t-3 = 0.2, w_t-2 = 0.3 and w_t-1 = 0.5. Demand observed in the previous three periods was as follows: A_t-3 = 2,200, A_t-2 = 1,950, A_t-1 = 2,050. What will be the demand forecast for period t?

• A) 2,000
• B) 2,095
• C) 1,980
• D) 2,050
• E) 1,875

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Definitions:

Halo Effect

A cognitive bias where an observer's overall impression of a person, company, brand, or product influences feelings and thoughts about that entity's character or properties.

Negative Impression

An unfavorable or detrimental perception or judgment formed about someone or something based on their actions or presentation.

Projection Bias

A cognitive bias where individuals overestimate how much their future selves will share their current preferences, feelings, and values.

Tacit Knowledge

Knowledge that is personal, context-specific, and hard to formalize or communicate, often learned through experience.