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CMA Final · Strategic Cost Management · Business Forecasting Models - Time Series and Regression Analysis

A Pune firm uses a 3-period centred moving average to estimate trend. Monthly sales (Rs lakh) for Jan to May are 40, 46, 43, 52, 49. What is the trend value for April?

The April trend value is 48.0 lakh, because a centred three-period moving average for April averages March, April and May sales: (43+52+49)/3 = 48. The value 47 belongs to March.

  1. A47.0Correct
  2. B46.0
  3. C48.0
  4. D44.0

Explanation

The centred 3-period average for April uses March, April and May: (43+52+49)/3 = 144/3 = 48. Wait, April is centred on March, April, May, so the value is 48.0. Using Feb-Apr (46+43+52)/3 = 47 is the trend for March, not April.

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