Problem 3-2 National Scan, Inc., sells radio frequency inventory tags. Monthly s

Question

Problem 3-2 National Scan, Inc., sells radio frequency inventory tags. Monthly sales for a seven-month period were as follows Sales (000)Units 19 18 13 27 16 Month Feb Mar May Jun Jul Aug 29 b. Forecast September sales volume using each of the following (1) A linear trend equation.(Round your intermediate calculations and final answer to 2 decimal places.) thousands (2) A five-month moving average. (Round your answer to 2 decimal places.) Moving average thousands (3) Exponential smoothing with a smoothing constant equal to .30, assuming a March forecast of 18(000). (Round your intermediate forecast values and final answer to 2 decimal places) Forecast thousands

Explanation / Answer

2. Moving average forecast the average of previous months.

Forecast of September = (13+27+16+22+29) / 5 = 21.4

4. Naive forecast the average of previous month. Forecast for September = Actual demand of August = 29.

5. Forecast for September using weighted average

= (0.2*16) + (0.1*22) + (0.7*29) = 3.2+2.2+20.3 = 25.7

4. Forecast for April

= 18(0.3) + 18(0.7) = 18.

Forecast for may

= 13(0.3) + 18(0.7) = 16.5

June

= 27(0.3) + 16.5(0.7) = 19.65

July

= 16(0.3) + 19.65(0.7) = 18. 55

August

= 22(0.3) + 18.55(0.7) = 19.58

September

= 29(0.3) + 19.58(0.7) = 22.4

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