The demand for a certain raw material used in a manufacturing organization varies from month to month. The consumption pattern of the material during the last six months (in metric tons) is given below Table Consumption pattern of raw material (metric tons)
|
Month
|
Demand
|
|
Month 1
|
20
|
|
Month 2
|
30
|
|
Month 3
|
20
|
|
Month 4
|
40
|
|
Month 5
|
50
|
|
Month 6
|
60
|
(i) Using the method of moving averages forecast the demand for month 7 using three period moving averages.
(ii) Suppose the three periods have the weights of 0.50 for the immediate past and 0.25 for two and three periods before what will be the new forecast?
(iii) Changing the number of periods for moving average to 2, 4 and 5 obtain the forecast in each of these cases
(iv) What do you conclude from the results obtained in (i) (ii) and (iii)