# 7875

How to slove last 2 question.

2. National Scan, Inc., sells radio frequency inventory tags. Monthly sales for a seven-month period were as follows: Month Sales (000 units)

Feb. 19

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Mar. 18

Apr. 15

May 20

Jun. 18

Jul. 22

Aug. 20

a. Plot the monthly data on a sheet of graph paper.

Month

Sales
(000)Units

Feb.

19

Mar.

18

Apr.

15

May

20

Jun.

18

Jul.

22

Aug.

20

b. Forecast September sales volume using each of the following:

(1) A linear trend equation.

t

Y

tY

1

19

19

2

18

36

3

15

45

4

20

80

5

18

90

6

22

132

7

20

140

28

132

542

with n = 7, St = 28, St2 = 140

b

=

nSty – StSy

=

7(542) – 28(132)

=

.50

nSt2 – (St)2

7(140) – 28(28)

a

=

SybSt

=

132 – .50(28)

=

16.86

n

7

For Sept., t = 8, and Yt = 16.86 + .50(8) = 20.86 (000)

(2) A five-month moving average.

MA5

=

15 + 20 + 18 + 22 + 20

=

19

5

(3) Exponential smoothing with a smoothing constant equal to .20, assuming a March forecast of 19(000).

Month

Forecast

=

F(old)

+

.20 [Actual – F(Old)]

April

18.8

=

19

+

.20 [18 – 19]

May

18.04

=

18.8

+

.20 [15 – 18.8]

June

18.43

=

18.04

+

.20 [20 – 18.04]

July

18.34

=

18.43

+

.20 [18 – 18.43]

August

19.07

=

18.34

+

.20 [22 – 18.34]

September

19.26

=

19.07

+

.20 [20 – 19.07]

(4) The naive approach.

20000

(5) A weighted average using .60 for August, .30 for July, and .10 for June.

0.60(20) + 0.30(22) + 0.10(18) = 20.40

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?