Assignment:
National Scan. Inc.. sells radio frequency inventory tags. Monthly sales for a seven-month period were as follows:
Month Sales (000 units)
Feb 19
Mar 18
Apr 15
May 20
Jun 18
July 22
Aug 20
a. Plot the monthly data on a sheet of graph paper.
b. Forecast September sales volume using each of the following:
- The naive approach.
- A five month moving average.
- A weighted average using .60 for August, .30 for July, and .10 for June.
- Exponential smoothing with a smoothing constant equal to .20. assuming a a March forecast of 19(000).
- A linear trend equation.
c. Which method seems least appropriate? Why?
d. What does use of the term sales rather than demand presume?