Question

QUESTION E

The sales of a factory, manufacturing bicyles, over the last 24 months were as follows:

MONTH	UNITS SOLD
1	1140
2	1180
3	1130
4	1180
5	1110
6	1200
7	1280
8	1340
9	1340
10	1240
11	1140
12	1230
13	1440
14	1530
15	1560
16	1350
17	1350
18	1420
19	1530
20	1530
21	1430
22	1430
23	1490
24	1570

It is obvious that the monthly sales are increasing, but it is also obvious to the production manager that he is getting close to his capacity. In fact, should demand exceed 1 600 units a month, the factory would have to be expanded to meet the requirements.

Investigate the possibility, by conventional forecasting methods (in other words, the moving averages) that the figure of 1 600 units will be exceeded in any of the next six months.

Answer 1

Hello

The excel forecasting moving averages output :

Timeline	Values	Moving Average	Forecast	Lower Confidence Bound	Upper Confidence Bound
1	1140
2	1180	1160
3	1130	1155
4	1180	1155
5	1110	1145
6	1200	1155
7	1280	1240
8	1340	1310
9	1340	1340
10	1240	1290
11	1140	1190
12	1230	1185
13	1440	1335
14	1530	1485
15	1560	1545
16	1350	1455
17	1350	1350
18	1420	1385
19	1530	1475
20	1530	1530
21	1430	1480
22	1430	1430
23	1490	1460
24	1570	1530	1570	1570	1570
25		1617	1664	1542	1786
26		1699	1735	1612	1858
27		1699	1663	1539	1787
28		1649	1635	1510	1760
29		1592	1549	1423	1675
30		1593	1638	1511	1765

And the corresponding Chart: ( I recommend you to first download it and then view it.)

I hope this solves your doubt.

Do give a thumbs up if you find this helpful.