National Scan, Inc., Sells Radio Frequency Inventory Tags

1. National scan, Inc., sells radio frequency inventory tags. Monthly sales for a seven-month period were as follows:


Month Sales
Feb 19
Mar 18
Apr 17
May 20
Jun 19
Jul 22
Aug 20



  1. Forecast September sales volume using the naïve approach.


  1. Forecast September sales volume using a linear equation. a=17.43, b = 0.46.


  1. Forecast September sales volume using a five-month moving average


  1. Forecast September sales volume using a weighted average using .60 for August, .30 for July, and .10 for June.


  1. Forecast September sales volume using Exponential smoothing with a smoothing constant equal to .20, assuming a March forecast of 19.


2, A dry cleaner uses exponential smoothing to forecast equipment usage at its main plant. August usage was forecast to be 88 percent of capacity; actual usage was 89.6 percent of capacity. A smoothing constant (Alpha) of .2 is used.


a.Prepare a forecast for September.


b.  Assuming actual September usage of 92 percent, prepare a forecast for October usage.




3. A cosmetics manufacturer’s marketing department has developed a linear trend equation that can be used to predict annual sales of its popular Hand & Foot Cream.


Ft  =80+14t




Ft   Annual forecast in sales (bottles)


t= 0 corresponds to 1990

a.    Predict annual sales for the year 2006 using the equation.




4.The manager of travel agency has been using a seasonally adjusted forecast to predict demand for packaged tours. The actual and predicted values are as follows:




Period Demand Predicted
1 129 124
2 194 200
3 156 150
4 91 94
5 85 80
6 132 140
7 126 128
8 126 124
9 95 100
10 149 150

a.    Compute MAD for the 5th  period


b.    Compute MAPE for the 10th period

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