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:

A linear trend equation.(Round your intermediate calculations and final answer to 2 decimal places.)

A five-month moving average. (Round your answer to 2 decimal places.)

Exponential smoothing with a smoothing constant equal to .20, assuming a March forecast of 16(000). (Round your intermediate forecast values and final answer to 2 decimal places)

A weighted average using .60 for August, .10 for July, and .30 for June. (Round your answer to 2 decimal places.)

National Scan, Inc., sells radio frequency inventory tags. Monthly sales for a seven-month period were as follows:

Explanation / Answer

Month Month(X) Sales(Y) X^2 Y^2 XY a b c = a^2 d = b^2 e = a*b Feb 1 17000 1 289000000 17000 Mar 2 17000 4 289000000 34000 Apr 3 12000 9 144000000 36000 May 4 21000 16 441000000 84000 Jun 5 17000 25 289000000 85000 Jul 6 24000 36 576000000 144000 Aug 7 21000 49 441000000 147000 28 129000 140 2469000000 547000 b.1 Linear Trend Equation is given as= a + Bx a = [(y - bx) / n b = [nxy - (x * y)] / [(n * x^2) - (x)^2)] n = 7 b = (7 * 547000 - 28*12900) / (7 * 140 - 28^2) = 217000/196 = 1107.14 a = (129000 - 1107.143*28) / 7 = 14000 Equation is given as 14000 + 1107.14x September Forecast = 14000 + 1107.14 * 8 = 22857.12 b.2 Forecast using 5 month moving average September Sales = (Sales Apr + Sales May + Sales June + Sales July + Sales Aug) / 5 = (12000 + 21000 + 17000 + 24000 + 21000) / 5 = 19000 units b.3 Forecast Using Exponential Smoothing has following formula Next forecast = Previous forecast + alpha * (Actual -Previous forecast) alpha is the smoothing factor = 0.20 March Forecast = 16000 (given) Month Sales(Y) Forecast a c = a^2 Feb 17000 Mar 17000 16000 Apr 12000 16200 May 21000 15360 Jun 17000 16488 Jul 24000 16590.4 Aug 21000 18072.32 September Forecast = 18072.32 + 0.20 (21000 - 18072.32) = 18657.86 b.4 Under Naïve Approach, actual data for previous period becomes forecast for current period. September Forecast = August Actual = 18000 units b.5 Weighted average using .60 for August, .10 for July, and .30 for June September Forecast = 0.60 * 21000 + 0.10 * 24000 + 0.30*17000 = 12600 + 2400 + 5100 = 20100 units

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