The sales of Cool-Man air conditioners have grown steadily during the past six years as shown...

The sales of Cool-Man air conditioners have grown steadily during the past six years as shown on the table below.

Year	Sales
1	450
2	495
3	518
4	563
5	584
6	592

(a) Provide a forecast by using a 3-year weighted moving average technique with weights 4, 2, and 1 (4 = most recent).

(b) Forecast sales using a 2-year moving average technique.

(c ) What is the MSE from the 2-year moving average?

Show work please

Solutions

Expert Solution

a. Weighted moving average method

Sum of weights = 4+2+1 = 7

Year	Sales	3-year weighted moving average	3-year weighted moving average
1	450
2	495
3	518
4	563	((5184)+(4952)+(450*1))/7	501.714
5	584	((5634)+(5182)+(495*1))/7	540.429
6	592	((5844)+(5632)+(518*1))/7	568.571

b. 2-year moving average method

Year	Sales	2-year moving average method	2-year moving average method
1	450
2	495
3	518	(450+495)/2	472.5
4	563	(495+518)/2	506.5
5	584	(518+563)/2	540.5
6	592	(563+584)/2	573.5

c. MSE for 2-year moving average method

Year	Sales	2-year moving average method	2-year moving average method	Error	Squared Error
1	450
2	495
3	518	(450+495)/2	472.5	45.5	2070.25
4	563	(495+518)/2	506.5	56.5	3192.25
5	584	(518+563)/2	540.5	43.5	1892.25
6	592	(563+584)/2	573.5	18.5	342.25
				MSE	1874.25

Rahul Sunny answered 2 years ago

Next > < Previous

Related Solutions

2. Sales of air conditioners have grown consistently over the years and the follow represents sales:...

2. Sales of air conditioners have grown consistently over the years and the follow represents sales: Year Sales 1 520 2 550 3 600 4 610 5 680 6 710 7 810 8 820 9 900 b. Using smoothing constants of .6 and .9, develop forecasts for the sales of air conditioners. c. What effect did the smoothing constant have on the forecast for air conditioners. Which smoothing constant gives the most accurate forecast? d. Forecast year 7 using linear...

Sales of? Volkswagen's popular Beetle have grown steadily at auto dealerships in Nevada during the past...

Sales of? Volkswagen's popular Beetle have grown steadily at auto dealerships in Nevada during the past 5 years? (see table below).?????????????????????????????????????????????????? Year Sales 1 455 2 502 3 516 4 555 5 590 ?a) Forecasted sales for year 6 using the trend projection? (linear regression) method are 620.5 sales ?(round your response to one decimal? place). b) What is the MAD? The MAD for a linear regression forecast is ______ sales ?(round your response to one decimal? place). c) What...

Zelmer Company manufactures tablecloths. Sales have grown rapidly over the past 2 years. As a result,...

Zelmer Company manufactures tablecloths. Sales have grown rapidly over the past 2 years. As a result, the president has installed a budgetary control system for 2017. The following data were used in developing the master manufacturing overhead budget for the Ironing Department, which is based on an activity index of direct labor hours. Variable costs Rate per Direct Labor Hour Annual Fixed Costs Indirect labor $0.40 Supervision $48,000 Indirect materials 0.50 Depreciation 18,000 Factory utilities 0.30 Insurance 12,000 Factory repairs...

Zelmer Company manufactures tablecloths. Sales have grown rapidly over the past 2 years. As a result,...

Zelmer Company manufactures tablecloths. Sales have grown rapidly over the past 2 years. As a result, the president has installed a budgetary control system for 2017. The following data were used in developing the master manufacturing overhead budget for the Ironing Department, which is based on an activity index of direct labor hours. Rate per Direct Variable Costs Labor Hour Annual Fixed Costs Indirect labor $0.40 Supervision $48,000 Indirect materials 0.50 Depreciation 18,000 Factory utilities 0.30 Insurance 12,000 Factory repairs...

Zelmer Company manufactures tablecloths. Sales have grown rapidly over the past 2 years. As a result,...

Zelmer Company manufactures tablecloths. Sales have grown rapidly over the past 2 years. As a result, the president has installed a budgetary control system for 2017. The following data were used in developing the master manufacturing overhead budget for the Ironing Department, which is based on an activity index of direct labor hours. Variable costs Rate per Direct Labor Hour Annual Fixed Costs Indirect labor $0.42 Supervision $44,160 Indirect materials 0.53 Depreciation 18,960 Factory utilities 0.31 Insurance 16,560 Factory repairs...

Australia incomes have historically grown over the past 100 years?

Problem 24-2A Zelmer Company manufactures tablecloths. Sales have grown rapidly over the past 2 years. As...

Problem 24-2A Zelmer Company manufactures tablecloths. Sales have grown rapidly over the past 2 years. As a result, the president has installed a budgetary control system for 2017. The following data were used in developing the master manufacturing overhead budget for the Ironing Department, which is based on an activity index of direct labor hours. Variable costs Rate per Direct Labor Hour Annual Fixed Costs Indirect labor $0.43 Supervision $45,120 Indirect materials 0.52 Depreciation 18,000 Factory utilities 0.33 Insurance 17,640...

Way Cool produces two different models of air conditioners. The company produces the mechanical systems in...

Way Cool produces two different models of air conditioners. The company produces the mechanical systems in its components department. The mechanical systems are combined with the housing assembly in its finishing department. The activities, costs, and drivers associated with these two manufacturing processes and the production support process follow. Process Activity Overhead Cost Driver Quantity Components Changeover $ 569,850 Number of batches 870 Machining 379,682 Machine hours 8,290 Setups 378,000 Number of setups 200 $ 1,327,532 Finishing Welding $ 274,860...

Way Cool produces two different models of air conditioners. The company produces the mechanical systems in...

Way Cool produces two different models of air conditioners. The company produces the mechanical systems in its components department. The mechanical systems are combined with the housing assembly in its finishing department. The activities, costs, and drivers associated with these two manufacturing processes and the production support process follow. (Loss amounts should be indicated with a minus sign. Round your intermediate calculations and round "Cost per unit and OH rate" answers to 2 decimal places.) Process Activity Overhead Cost Driver...

Way Cool produces two different models of air conditioners. The company produces the mechanical systems in...

Way Cool produces two different models of air conditioners. The company produces the mechanical systems in their components department. The mechanical systems are combined with the housing assembly in its finishing department. The activities, costs, and drivers associated with these two manufacturing processes and the production support process follow. Process Activity Overhead Cost Driver Quantity Components Changeover $ 468,950 Number of batches 830 Machining 392,238 Machine hours 8,490 Setups 109,800 Number of setups 60 $ 970,988 Finishing Welding $ 315,360...

Subjects