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National Scan Inc. sells radio frequency inventory tags. Monthly sales for a seven-month period were as follows:
Month Sales (000) Units
b. Forecast September sales volume using each of the following:
(1) The naive approach.
(2) A five month moving average.
(3) A weighted average using .60 for August, .30 for July, and .10 for June.
(4) Exponential smoothing with a smoothing constant equal to .20, assuming a a March forecast of 19(000).
(5) A linear trend equation.
c. Which method seems least appropriate? Why?
d. What does use of the term sales rather than demand presume?
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