Question

Please answer part 2 of B

Storrs Cycles has just started selling the new Cyclone mountain bike, with monthly sales as shown in the table. Month Sales Jan 407 Feb 372 Mar 410 Apr 370 a) Based on the given monthly sales data, it can be said that there is not a strong linear trend in sales over time. b) First, co-owner Bob Day wants to forecast by exponential smoothing by initially setting February's forecast equal to January's sales with a = 0.10. Using the forecasting method, Bob's forecast for the month of May is (round your response to two decimal places): Forecast Month Jan Feb Mar Apr Sales 407 372 410 370 407.00 403.50 404.15 400.73 May Second, co-owner Sherry Snyder wants to forecast using a three-period moving average. The forecast for the month of May is (round your response to two decimal places). Forecast Month Jan Feb Mar Apr May Sales 407 372 410 370 396.33

Answer 1

Moving average forecast = Average of previous three months

Forecast for May = (Feb + Mar + April) / 3

= (372 + 410 + 370) / 3 = 384

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