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Demand Forecasting by Moving Average Method

You have the following data for the last 12 months' sales for the PRQ Corporation (in thousands of dollars):

January 500 July 610

February 520 August 620

March 520 September 580

April 510 October 550

May 530 November 510

June 580 December 480

a. Calculate a 3-month centered moving average.
b. Use this moving average to forecast sales for January of next year.
c. If you were asked to forecast January and February sales for next year, would you be confident of your forecast using the preceding moving averages? Why or why not?

Solution Summary

The solution gives step by step method for forecasting sales for the PRQ Corporation based on 3 month centered moving average.