Ms. Winnie Lins company sells computers. Monthly sales for a six-month period are as follows: MONTH SALES

Question:

Ms. Winnie Lin’s company sells computers. Monthly sales for a six-month period are as follows:
MONTH SALES
Jan ........ 18,000
Feb ........ 22,000
Mar ........ 16,000
Apr ........ 18,000
May ........ 20,000
Jun ........ 24,000
a. Plot the monthly data on a sheet of graph paper.
b. Compute the sales forecast for July using the following approaches:
(1) A four-month moving average;
(2) A weighted three-month moving average using .50 for June, .30 for May and .20 for April;
(3) A linear trend equation
(4) Exponential smoothing with α (smoothing constant) equal to .40, assuming a February forecast of 18,000
c. Which method do you think is the least appropriate? Why?