CMA Final · Strategic Cost Management · Business Forecasting Models - Time Series and Regression Analysis
Sales of Kaveri Traders (₹ lakh) for four successive quarters were 40, 52, 44 and 56. Using a 2-quarter simple moving average, what is the forecast for the fifth quarter?
The forecast is ₹50 lakh. A 2-quarter simple moving average takes the mean of the two most recent quarters, 44 and 56, giving 50. Averaging all four quarters (48) ignores the specified window length.
- A48
- B50Correct
- C52
- D54
Explanation
A 2-quarter moving average uses the latest two observations: (44 + 56)/2 = 50. Using all four quarters gives 48, which is the wrong window. Using the first two gives 46, also wrong.
Did you get it right without looking?
One question tells you little. A timed set on Business Forecasting Models - Time Series and Regression Analysis shows your real accuracy, how long you take and where you lose marks.
More Business Forecasting Models - Time Series and Regression Analysis questions
- A Pune firm uses a 3-period centred moving average to smooth quarterly sales (in units): Q1 120, Q2 150, Q3 135, Q4 165, Q5 180. What is the…
- In a simple regression of cost on activity, the coefficient of correlation r is −0.8. What is the coefficient of determination, and what doe…
- A firm uses exponential smoothing with alpha = 0.3. The forecast for March was 200 units and actual March demand was 240 units. What is the …
- A regression of monthly electricity cost Y (₹ thousand) on machine hours X (thousand) for a plant gives: n = 5, ΣX = 15, ΣY = 40, ΣXY = 130,…
- In a simple regression of sales on advertising, the correlation coefficient r is 0.8. What proportion of the variation in sales is NOT expla…
- A Coimbatore firm fits a linear trend Y = a + bX to 5 years of output data with X coded as -2, -1, 0, 1, 2. The sum of Y is 400 and the sum …