Question

. Shipments (in tons) of welded tube by an aluminum producer are shown below:

Year	1	2	3	4	5	6	7	8	9	10	11
Tons	2	3	6	10	8	7	12	14	14	18	19

Required:-

1. Graph the data, and comment on the relationship.
2. Compute a 3-year moving average, plot it as a dotted line, and use it to forecast shipments in year 12.
3. Using a weight of 3 for the most recent data, 2 for the next, and 1 for the oldest, forecast shipments in year 12.

Answer 1

The demand trend in this given data seems to be a cyclic trend where there is an up and down movement in the demand or shipment curve.

b. 3 Year Moving Average

Year	Tons	3 year moving average	Calculation
1	2
2	3	3.7	= (6+3+2)/3 = 11/3 =3.7
3	6	6.3	= (10+6+3)/3 = 19/3 = 6.3
4	10	8	= (8+10+6)/3 = 24/3 = 8
5	8	18.3	= (7+8+10)/3 = 25/3 = 8.3
6	7	9	= (12+7+8)/3 = 27/3 = 9
7	12	11	= (14+12+7)/3 = 33/3 = 11
8	14	13.3	= (14+14+12)/3 = 40/3 = 13.3
9	14	15.3	= (18+14+14)/3 = 46/3 = 15.3
10	18	17	= (19+18+14)/3 = 51/3 = 17
11	19

The moving average forecast of year 12 will be of the latest which is 17 tons.

C. Weighted Forecast

The formula to calculate Weighted Forecast is

Weighted Average = Sum of weighted tons / Sum of Weight

= (14)(1) + (18)(2) + (19)(3) / 1 + 2 + 3

= 14 + 36 + 57 / 6

= 107 / 6

= 17.8 tons.

The forecast shipment in the year 12 will be 17.8 tons