Question

Sales data of a product is given in the following table:

Month	January	February	March	April	May
Number of units sold	10	11	16	19	25

Regarding forecast for the month of June, which one of the following statements is TRUE?

1. Moving average will forecast a higher value compared to regression
2. Higher the value of order N, the greater will be the forecast value by moving average.
3. Exponential smoothing will forecast a higher value compared to regression.
4. Regression will forecast a higher value compared to moving average

Answer 1

Correct Answer - Option 4 : Regression will forecast a higher value compared to moving average

Month	January	February	March	April	May
Number of units sold	10	11	16	19	25

when the forecast value shows an increasing trend then the regression will forecast a higher value compared to the moving average.