A store records demand for a product over 4 weeks: Week 1 = 50, Week 2 = 60, Week 3 = 55, Week 4 = 65. Using a 2-week moving average, what is the forecast for Week 5?

Question

BlackTom AI · Accepted Answer

When using a 2-week moving average to forecast Week 5, the guideline is to average the two most recent observed values, which are Week 3 and Week 4.

Option 1: 55. This would correspond to using only Week 3, or misapplying a shorter window. A 2-week moving average requires two data points, so 55 alone is not the correct calculation for Week 5.

Option 2: 57.5. This value would arise if you averaged Week 3 (55) with Week 2 (60) instead of the two most recent weeks. However, moving averages for forecasting next period rely on the latest consecutive observations, not an earlier pair.

Option 3: 62.5. This result would come from averaging Week 4 (65) with Week 3 (55) but in the reverse order or with a different pairing that isn’t consistent with a standard 2-week moving average for Week 5. The standard approach uses the two most recent weeks only.

Option 4: 60. This is the average of Week 3 (55) and Week 4 (65): (55 + 65) / 2 = 60. This adheres to the definition of a 2-week moving average forecast, which uses the two most recent observed values to predict the next period.

In sum, for a 2-week moving average forecast for Week 5, you take the mean of the last two actual weeks, 55 and 65, yielding 60. The other options correspond to incorrect pairings or misapplications of the moving average rule.

A store records demand for a product over 4 weeks: Week 1 = 50, Week 2 = 60, Week 3 = 55, Week 4 = 65. Using a 2-week moving average, what is the forecast for Week 5?

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