National Scan, Inc., Sells Radio Frequency Inventory Tags

1. National scan, Inc., sells radio frequency inventory tags. Monthly sales for a seven-month period were as follows:

 

Month	Sales
	(units)
Feb	19
Mar	18
Apr	17
May	20
Jun	19
Jul	22
Aug	20

 

 

1. Forecast September sales volume using the naïve approach.

 

1. Forecast September sales volume using a linear equation. a=17.43, b = 0.46.

 

1. Forecast September sales volume using a five-month moving average

 

1. Forecast September sales volume using a weighted average using .60 for August, .30 for July, and .10 for June.

 

1. Forecast September sales volume using Exponential smoothing with a smoothing constant equal to .20, assuming a March forecast of 19.

 

2, A dry cleaner uses exponential smoothing to forecast equipment usage at its main plant. August usage was forecast to be 88 percent of capacity; actual usage was 89.6 percent of capacity. A smoothing constant (Alpha) of .2 is used.

 

a.Prepare a forecast for September.

 

b.  Assuming actual September usage of 92 percent, prepare a forecast for October usage.

 

 

 

3. A cosmetics manufacturer’s marketing department has developed a linear trend equation that can be used to predict annual sales of its popular Hand & Foot Cream.

 

F_t  =80+14t

 

Where

 

F_t   Annual forecast in sales (bottles)

 

t= 0 corresponds to 1990