National Scan, Inc., sells radio frequency inventory tags. Monthly sales for a s

Question

National Scan, Inc., sells radio frequency inventory tags. Monthly sales for a seven-month period were as follows:
Month Sales (000)units
Feb 19
Mar. 18
Apr. 15
May 20
Jun. 18
July 22
Aug 20

Forecast September sales volume using each of the following:
1. A linear equation.
2. A five months moving average.
3. Exponential smoothing constant equal to .20, assuming a March forecast of 19 (000).
4. The naive approach.
5. A weighted average using .60 for August .30, for July, and .10 for June
6. Which method seems more appropriate? Why?
7. What does use of the term sales rather than demand presume?

Explanation / Answer

Month

naive

MA

WMA

ES

LT

SEP

20

19

20.4

19.26

20.86

Month

naive

MA

WMA

ES

LT

SEP

20

19

20.4

19.26

20.86

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