Assume that your stock of sales merchandise is maintained based on the forecast

Question

Assume that your stock of sales merchandise is maintained based on the forecast demand. If the distributor's sales personnel call on the first day of each month, compute your forecast sales by each of the three methods requested here.

a. Using a simple three-month moving average, what is the forecast for September? (Round your answer to 2 decimal places.)

Forecast for September            

b. Using a weighted moving average, what is the forecast for September with weights of 0.20, 0.30, and 0.50 for June, July, and August, respectively? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Forecast for September            

c. Using single exponential smoothing and assuming that the forecast for June had been 140, forecast sales for September with a smoothing constant ? of 0.30. (Round your answer to 2 decimal places.)

Forecast for September            

ACTUAL June 152 July 192 August 222

Explanation / Answer

a)

Forecast for September =(152+192+222)/3=188.67

b)

forecast for September=(152*0.2+192*0.3+222*0.5)=199.00

c)

as for exponential smoothing forecast =alpha*last month actual+(1-alpha)*last month forecast

forecast sales for Septembe =177.28

actual forecast June 152 140 July 192 143.6 Aug 222 158.12 sep 177.28

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