Question

Which of the following is true concerning the weighted moving average?

• A. The oldest data will generally be given the greatest weight.
• B. If the weighted moving average forecast is 57.3, then the final forecast must be rounded up to 58
• C. If the most recent periods are too heavily weighted, the forecast might overreact
• D. The weighted moving average is usually more accurate than a simple moving average.

Answer 1

Answer:

D. The weighted moving average is usually more accurate than a simple moving average.

Weighted Moving Average Method assigns the highest weightage to recent data and decreases for older data points. The formula for n period weighted moving average is given. The method is more accurate than a simple moving average. Simple Moving Average takes the average of past data points. Exponential forecasting uses a smoothing constant and forecast error to predict future demand.