Month: Sept Oct Nov Dec Sales: 22 22 23 24 This exercise contains only parts b a

Question

Month: Sept Oct Nov Dec

Sales: 22 22 23 24

This exercise contains only parts b and c.

b) Forecast January sales using each of the following methods.

i) Compute the January sales forecast using naive method.

The January sales forecast using the naive methodequals _____ sales. (Enter your response as a whole number.)

ii) Compute the January sales forecast using a 3-month moving average.

The January sales forecast using a 3-month moving average approachequals _____ sales. (Round your response to two decimal places.)

iii) Compute the January sales forecast using a 3-month weighted average with weights of 0.10, 0.30, and 0.60 with the heaviest weights applied to the most recent months.

The January sales forecast using a 3-month weighted average equals _____ sales. (Round your response to two decimal places.)

iv) Compute the January sales forecast using exponential smoothing with alphaequals 0.30 and a starting forecast for September being 21.

The January sales forecast using exponential smoothingequals ______ sales. (Round your response to two decimal places.)

v) Compute the January sales forecast using a trend projection.

Using a method of trend projection, the forecast for January salesequals ______ sales. (Round your response to two decimal places.)

c) The method that can be used for making a forecast for the month of March is a _________________ .

Explanation / Answer

i) The January sales forecast using the naive method equals 24 Sales

In naive forecast, there is an increament and the last month data is used for the current month.

ii) The January sales forecast using a 3-month moving average approach equals 23 sales

F(Jan) = (22+23+24)/3

= 23

iii) The January sales forecast using a 3-month weighted average equals 23.5 sales

F(Jan) = 0.6*24 + 0.3*23 + 0.1*22

= 23.5

iv) The January sales forecast using exponential smoothing equals 22.78 sales

F(Oct) = 0.4*22 + 0.6*20

= 20.8

F(Nov) = 0.4*22 + 0.6*20.8

= 21.28

F(Dec) = 0.4*23 + 0.6*21.28

= 21.97

F(Jan) = 0.4*24 + 0.6*21.97

= 22.78

c) With the data present, there is no method that would be able to calculate the forecast for the month of march

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