II. The number of plumbing repair jobs performed by Augur\'s Plumbing Service in
ID: 344299 • Letter: I
Question
II. The number of plumbing repair jobs performed by Augur's Plumbing Service in each of the last four months is listed below. Month April May June July Jobs 104 96 89 85 Show all caleulations in answering the following questions. a. Use the textbook naïve method to forecast jobs in August. b. Now use a three-month moving average method to forecast jobs in August. c. Use a four-month moving average to forecast jobs in August. d. Use a weighted three-month moving average, with weights of.6,.3 and.1, to forecast August jobs.Explanation / Answer
a) Using a naive approach the forecast for a period is equal to the actual value for the immediately previous period. So the forecasted jobs in August = Actual number of jobs in July = 85
b) A three period moving average method averages the actual value for the previous three periods to generate the forecast for the next period. This can be calculated as the sum of the actual value for the previous three periods / 3
So forecast for August = (96+89+85)/3 = 270/3 = 90
C) A four period moving average method averages the actual value for the previous four periods to generate the forecast for the next period. This can be calculated as the sum of the actual value for the previous four periods / 4
So forecast for August = (104+96+89+95)/4 = 384/4 = 96
d) Using a three period weighted moving average method the forecast for a period is calculated as the sum of the product of the actual value and their respective weights for the previous three periods. So using the above formula with weight of 0.6,0.3 and 0.1 assigning the highest weight to the most recent period the forecasted jobs fot the month of August is as follows : (0.6 x 85) + (0.3 x 89) + (0.1 x 96) = 51+26.7+9.6 = 87.3