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1. National Scan, Inc sells radio frequency inventory tags. Monthly sales for a seven-month period were as follows:
Month Sales (000 units)
Feb. 20
Mar. 19
Apr. 16
May 21
Jun. 19
Jul. 23
Aug. 21
a. Plot the monthly data on a sheet of graph paper.
b. Forecast September sales volume using each of the following:
(1) The naive approach
(2) A five month moving average
(3) A weighted average using .60 for August, .30 for July, and .10 for June
(4) Exponential smoothing with a smoothing constant equal to .20, assuming a a March forecast of 19(000)
(5) A linear trend equation
c. Which method seems least appropriate? Why? (Hint: Refer to your plot from part a.)
d. What does use of the term sales rather than demand presume?
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