Question

Naïve Sales Forecast Suppose a firm has had the following historic sales figures What would be the forecast for next years sales using the Naïve approach? 15-1 (LG15-3) Year 2012 2013 2014 2015 2016 Sales $1,500,000 $1,750,000$1,400,000 $2,000,000 $1,600000
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Answer #1

As per Naive's approach, the next year sales will be the sales of last year sales. That means next year (2017) sales is $1,600,000 which is the last year's (2016) sales is $1,600,000. For better understanding, the below table is presented.

Year Sales Sales as per Naîve approach 2013 2014 2015 2016 2017 $1,500,000 S1,750,000 $1,400,000 $2,000,000 $1,600,000 2012 $1.500.000 $1.750.000 S1.400.000 S2.000.000 $1.600,000

Therefore, next year's sales using Naive's approach is $1,600,000.

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