A can opener manufacturer has had monthly sales for a seven-month period as follows:
MonthSales (000 units)
Feb…………………………… 19
Mar…………………………… 18
Apr…………………………… 15
May…………………………… 20
Jun…………………………… IS
Jul…………………………… 22
Aug…………………………… 20
a. Plot the data.
b. Forecast September’s sales volume using each of the following:
i. A linear trend equation. (Use of Excel's Trendline, with display Equation on chart option, is recommended).
ii. A four-month moving average.
iii. Exponential smoothing with a smoothing constant .10, assuming a March forecast of 19(000).
iv. The naive approach.
v. A weighted average using .50 for August, .30 for July, and .20 for June.
c. Which method seems least appropriate? Why?
d. What does use of the term sales rather than demand presume?