The following data are monthly sales of jeans at a local department store. The b

Question

The following data are monthly sales of jeans at a local department store. The buyer would like to forecast sales of jeans for the next month, July.

Forecast sales of jeans for March through June using the naive method, a two-period moving average, and exponential smoothing with an ? = 0.2. (Round answers to 1 decimal place, e.g. 15.2.)

The following data are monthly sales of jeans at a local department store. The buyer would like to forecast sales of jeans for the next month, July.

Month Sales January 45 February 30 March 40 April 50 May 55 June 47

Explanation / Answer

Jan : 45

Feb: 30

Mar: 40

Apr: 50

May: 55

June: 47

Two month moving average is given by

m2 = (45+30)/2 = 37.5

m3 = (30+40)/2 = 35

m4 = (40+50) / 2 = 45

m5 = (50+55) / 2 = 52.5

m6 = (55+47) / 2 = 51

Forecast for month 7 (July) is simple the moving average for the month before that = m6 = 51

Using exponential smoothing, with a smoothing constant of 0.2 we have

M1 = Y1 = 45

M2 = 0.8*30+ 0.2 *45 = 24 + 9 = 33

M3 = 0.8*40 + 0.2*33 = 32 + 6.6 = 38.6

M4 = 0.8 *50+ 0.2 * 38.6 = 47.72

M5= 0.8*55+ 0.2* 47.72 = 53.54

M6 = 0.8*47 + 0.2*53.54 = 48.30

M7 = 0.8*51 + 0.2 *48.30 = 50.46

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