Part 1 (Forecasting) The sonam Corporation had the following sales during the pa
ID: 3020511 • Letter: P
Question
Part 1 (Forecasting)
The sonam Corporation had the following sales during the past 10 years (in $1000s):
Year
Sales
2003
200
2004
215
2005
237
2006
260
2007
278
2008
302
2009
320
2010
345
2011
360
2012
382
a. Calculate a trend line, and forecast sales for 2013. How confident are you of this forecast?
b. Use exponential smoothing with a smoothing factor w = 0.7. What is your 2013 forecast? How confident are you of this forecast?
Part 2.(Forecasting)
You have the following data for the last 12 months’ sales for the PRQ Corporation (in $1000s):
Month
Sales
January
500
February
520
March
520
April
510
May
530
June
580
July
610
August
620
September
580
October
550
November
510
December
480
a. Calculate a 3-month centered moving average.
b. Use this moving average to forecast sales for January of next year.
c. If you were asked to forecast January and February sales for next year, would you be confident of your forecast using the preceding moving average? Why or why not?
please include the explaination if you can
Year
Sales
2003
200
2004
215
2005
237
2006
260
2007
278
2008
302
2009
320
2010
345
2011
360
2012
382
Explanation / Answer
a. The regression equation of the trend line is The regression equation is
Sales = - 41040 + 20.6 Year
for the year 2013, forecast sales is 403.133. Since this regression coefficient specifies there is a linear relation ship between the year and sales. So the forecasted sales for the 2013 is justified.
b.using exponential smoothing :
The forecasted sales for the year is 373.151
Please ask one question in one post.
Week Calls Exponential smoothing alpha=0.7 Exponential smoothing forecast 2003 200 200 2004 215 210.5 200 2005 237 229.05 210.5 2006 260 250.715 229.05 2007 278 269.8145 250.715 2008 302 292.3444 269.8145 2009 320 311.7033 292.3444 2010 345 335.011 311.7033 2011 360 352.5033 335.011 2012 382 373.151 352.5033 2013 373.151