Tarheels R Us sells UNC merchandise in Chapel Hill. Having UNC gear in stock to sell to
Question:
Tarheels R’ Us sells UNC merchandise in Chapel Hill. Having UNC gear in stock to sell to visitors is crucial, so the shop keeps inventory on hand and replenishes weekly. One such item are t-shirts. In order to have the appropriate inventory on hand, it is important to forecast weekly sales and determine the inventory levels accordingly at the beginning of each week. Your help is needed to evaluate alternative forecasting methods. The following table contains the sales for t-shirts for the previous 17 weeks.
Week | Sales | Week | Sales |
1 | 310 | 10 | 580 |
2 | 330 | 11 | 650 |
3 | 390 | 12 | 640 |
4 | 405 | 13 | 690 |
5 | 495 | 14 | 700 |
6 | 510 | 15 | 740 |
7 | 525 | 16 | 765 |
8 | 520 | 17 | 805 |
9 | 543 | 18 | - |
1. If you were to use a 3-week simple moving average to forecast sales for weeks 4 to 18, how would you calculate it?
2. You suspect that recent sales data contains more useful information than older data. Accordingly, you decide to use a 3-week weighted moving average method with weights of 0.7, 0.2 and 0.1 (most recent to least recent) for weeks 4 to 18. How would you calculate it?
3. What effect does “n” have in moving averages?
Core Concepts Of Accounting Information Systems
ISBN: 9780470507025
11th Edition
Authors: Nancy A. Bagranoff, Mark G. Simkin, Carolyn Strand Norman