Last Monday the operation served 120 meals, the next Monday 135 meals, and the following Monday 150 meals. Using a 3-period moving average, what is the forecast for the next Monday?

Last Monday the operation served 120 meals, the next Monday 135 meals, and the following Monday 150 meals. Using a 3-period moving average, what is the forecast for the next Monday?

• A. 125 meals
• B. 130 meals
• C. 140 meals
• D. 135 meals

Answer: (D)

In a 3-period moving average forecast, you predict the next period by averaging the three most recent actual values. The last three Mondays produced 120, 135, and 150 meals. Adding them gives 405, and dividing by 3 yields 135. So the forecast for the next Monday is 135 meals. The other numbers don’t come from averaging those three recent observations, so they aren’t the 3-period moving average forecast.

In a 3-period moving average forecast, you predict the next period by averaging the three most recent actual values. The last three Mondays produced 120, 135, and 150 meals. Adding them gives 405, and dividing by 3 yields 135. So the forecast for the next Monday is 135 meals. The other numbers don’t come from averaging those three recent observations, so they aren’t the 3-period moving average forecast.