Question

Assignment 2.2: Forecasting Problem A Rio Farm Implements Inc. sells Commercial Rider Mowers. Monthly sales for a nine-month period were as follows Commercial Rider Mower Sales MONTH 19 January 18 February 15 March 20 April 18 May 17 June 19 July 22 August 23 September Forecast October sales using (SHOW YOUR WORK): a) the Naive approach b) A four-manth moving average c)a stx-month moving average d) a three-month weighted average using.60 for the prior manth .30 for the next prior month, and 10 for the earliest month used for the model

Answer 1

a) using the naive approach

F(October) = Actual(September)

= 23

b) using the four month moving average

F(October) = {Actual(June) + Actual(July) + Actual(August) + Actual(September)}/4

= (17 + 19 + 22 + 23)/4

= 20.25

c) using the six month moving average

F(October) = {Actual(April) + Actual(May) + Actual(June) + Actual(July) + Actual(August) + Actual(September)}/6

= (20 + 18 + 17 + 19 + 22 + 23)/6

= 19.83

d) using the 3 month weighted average method

F(October) = 0.6*Actual(September) + 0.3*Actual(August) + 0.1*Actual(July)

= 0.6*23 + 0.3*22 + 0.1*19

= 22.3