National Scan, Inc., sells radio frequency inventory tags. Monthly sales for a seven-month period were as follows:MonthFeb.Sales(000)Units16Mar18Apr.13May.20Jun.22Jul.Aug.2328Click here for the Excel Data Filea. Forecast September sales volume using each of the following:(1) The naive approach.Naive approachthousands13

Forecasting September Sales with Naive ApproachThe naive approach is a simple forecasting method…

Answered: National Scan, Inc., sells radio…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter13: Regression And Forecasting Models

Section13.6: Moving Averages Models

Problem 22P: The file P13_22.xlsx contains total monthly U.S. retail sales data. While holding out the final six...

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The file P13_22.xlsx contains total monthly U.S. retail sales data. While holding out the final six months of observations for validation purposes, use the method of moving averages with a carefully chosen span to forecast U.S. retail sales in the next year. Comment on the performance of your model. What makes this time series more challenging to forecast?
The file P13_42.xlsx contains monthly data on consumer revolving credit (in millions of dollars) through credit unions. a. Use these data to forecast consumer revolving credit through credit unions for the next 12 months. Do it in two ways. First, fit an exponential trend to the series. Second, use Holts method with optimized smoothing constants. b. Which of these two methods appears to provide the best forecasts? Answer by comparing their MAPE values.
The Baker Company wants to develop a budget to predict how overhead costs vary with activity levels. Management is trying to decide whether direct labor hours (DLH) or units produced is the better measure of activity for the firm. Monthly data for the preceding 24 months appear in the file P13_40.xlsx. Use regression analysis to determine which measure, DLH or Units (or both), should be used for the budget. How would the regression equation be used to obtain the budget for the firms overhead costs?
The file P13_26.xlsx contains the monthly number of airline tickets sold by the CareFree Travel Agency. a. Create a time series chart of the data. Based on what you see, which of the exponential smoothing models do you think will provide the best forecasting model? Why? b. Use simple exponential smoothing to forecast these data, using a smoothing constant of 0.1. c. Repeat part b, but search for the smoothing constant that makes RMSE as small as possible. Does it make much of an improvement over the model in part b?
The file P13_02.xlsx contains five years of monthly data on sales (number of units sold) for a particular company. The company suspects that except for random noise, its sales are growing by a constant percentage each month and will continue to do so for at least the near future. a. Explain briefly whether the plot of the series visually supports the companys suspicion. b. By what percentage are sales increasing each month? c. What is the MAPE for the forecast model in part b? In words, what does it measure? Considering its magnitude, does the model seem to be doing a good job? d. In words, how does the model make forecasts for future months? Specifically, given the forecast value for the last month in the data set, what simple arithmetic could you use to obtain forecasts for the next few months?

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