Sales of Hot-Blast heaters have grown steadily during the past five years, as shown in the following table:
YEAR SALES
1 ………………………… 480
2 ………………………… 525
3 ………………………… 548
4 ………………………… 593
5 ………………………… 614
(a) Using exponential smoothing constants of 0.35, 0.65, and 0.95, develop forecasts for years 2 through 6. The sales manager had predicted, before the business started, that year l’s sales would be 440 air conditioners. Which smoothing constant gives the most accurate forecast?
(b) Use a three-year moving average forecasting model to forecast sales of heaters.
(c) Using linear trend analysis, develop a forecasting model for the sales of heaters.
(d) Which of the methods analyzed here would you use? Explain your answer.