Question

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

Month	Sales (000)Units
Feb.	12
Mar.	22
Apr.	9
May.	24
Jun.	19
Jul.	27
Aug.	24

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.)

Yt ?? 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 .10, assuming a March forecast of 15(000). (Round your intermediate forecast values and final answer to 2 decimal places)

Forecast ?? thousands

(4) The naive approach.

Naive approach ?? thousands

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

Weighted average ?? thousands

Answer 1

FORMULA

NAIVE = DEMAND FOR PREVIOUS PERIOD

MA = SIGMA(PREVIOUS N DEMANDS) / N

WEIGHTED MA = SIGMA(WEIGHT * DEMAND) / SUM OF WEIGHTS

EXPONENTIAL SMOOTHING = PREVIOUS FORECAST + (ALPHA * (PREVIOUS DEMAND - PREVIOUS FORECAST)

LINEAR REGRESSION:

INTERCEPT = INTERCEPT(RANGE Y, RANGE X)

SLOPE = SLOPE(RANGE Y, RANGE X)

FORECAST = Y = A + Bx

A = INTERCEPT, B = SLOPE, x = PERIOD

INTERCEPT = 11.57, SLOPE = 2

PERIOD	PERIOD	SALES	NAIVE	5PERIOD MOVING AVERAGE	WEIGHTED MOVING AVERAGE	EXPONENTIAL SMOOTHING ALPHA = 0.1	REGRESSION
1	FEBRUARY	12
2	MARCH	22				15
3	APRIL	9				15 + (0.1 * (22 - 15)) = 15.7
4	MAY	24				15.7 + (0.1 * (9 - 15.7)) = 15.03
5	JUNE	19				15.03 + (0.1 * (24 - 15.03)) = 15.93
6	JULY	27				15.93 + (0.1 * (19 - 15.93)) = 16.24
7	AUGUST	24				16.24 + (0.1 * (27 - 16.24)) = 17.32
8			24	9 + 24 + 19 + 27 + 24 / 5 = 20.6	(19 + 0.3) + (27 + 0.1) + (24 + 0.6) / 1 = 22.8	17.32 + (0.1 * (24 - 17.32)) = 17.99	11.57 + (2 * 8) = 27.57