Consider the following monthly sales data for a company: Consider the 5 month, 4

Question

Consider the following monthly sales data for a company:

Consider the 5 month, 4 month, and 3 month moving average. Which one fits the actual value or June 2016 the best? (That is, has the smallest absolute deviation).

5 month.

4 month.

3 month.

Both A and C.

Jan-2015 147772 Feb-2015 144335 Mar-2015 163943 Apr-2015 169634 May-2015 175371 Jun-2015 174825 Jul-2015 176995 Aug-2015 176208 Sep-2015 170202 Oct-2015 175510 Nov-2015 180364 Dec-2015 217629 Jan-2016 154400 Feb-2016 155596 Mar-2016 183782 Apr-2016 181209 May-2016 186359 Jun-2016 189244 Jul-2016 184978 Aug-2016 192925

Explanation / Answer

Here 5th month has the smallest absolute deviation i.e.

abs(189244-175371)

=13873

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