Question

The monthly sales for Yazici Batteries, Inc., were as follows: Jan Month Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec 24 Sales 19 23 16 15 13 15 17 18 22 21 23 This exercise contains only parts b and c. b) The forecast for the next month (Jan) using the naive method 24 sales (round your response to a whole number) The forecast for the next period (Jan) using a 3-month moving average approach 22.67sales (round your response to two decimal places) = 21.7 sales (round The forecast for the next period (Jan) using a 6-month weighted average with weights of 0.10, 0.10, 0.10, 0.20, 0.20, and 0.30, where the heaviest weights are applied to the most recent month = your response to one decimal place). Using exponential smoothing with a 0.30 and a September forecast of 21.00, the forecast for the next period (Jan) = 22.42 sales (round your response to two decimal places). Using a method of trend projection, the forecast for the next month (Jan) sales (round your response to two decimal places)

Answer 1

b)

Forecast for the next month (Jan) using naive method = 24 sales

Naive forecasting is estimating technique in which the last period's actuals are used as this period's forecast, without adjusting them or attempting to establish causal factors.

Forecast for the next month (Jan) using 3- month moving average approach = (21+23+24)/ 3 = 22.67 sales.

Forecast for the next month (Jan) using 6- month weighted average approach = (0.1*17+0.1*18+0.1*22+0.2*21+0.2*23+0.3*24) = 21.7 sales

Using exponential smoothing with alpha = 0.2 and Sep forecast is 21.00

Forecast (t+1) = alpha * Actual (t) + (1-alpha)*Forecast(t)

Forecast for Oct = 0.20*22+(1-0.20)*21 = 21.2

Forecast for Nov= 0.20*21+(1-0.20)*21.2 = 21.16

Forecast for Dec= 0.20*23+(1-0.20)*21.16 = 21.53

Forecast for Jan= 0.20*24+(1-0.20)*21.53 = 22.02 sales

For method of trend projection, we will show approach using excel for trend line to calculate Jan forecast. We will least square method here.

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As per trend projection, the equation is

y = 0.4965x + 15.606

Forecast for next month (Jan) = 0.4965*13 + 15.606 = 22.06 sales

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