Beyond Tea Inc. wants to forecast sales of its menthol green tea. The company wa
ID: 445624 • Letter: B
Question
Beyond Tea Inc. wants to forecast sales of its menthol green tea. The company wants to use simple mean or a three period moving average forecast monthly sales. Given sales data for the past 10 months use both forecasting methods to forecast periods 7 to 10 and then evaluate each. Which method should they use? Use the selected method to make a forecast for month 11. Show all work. No Excel.
MONTH SALES
1 5
2 8
3 15
4 18
5 20
6 19
7 17
8 18
9 19
10 21
Explanation / Answer
1)three period moving average forecast monthly sales
Particulars = Sales
4th month= 5+8+15/3=28/3=9.3
5th month = 8+15+18 /3=13.6
6th month =15+18+20=53/3=17.6
7th month = 18+20+19/3=57/3=19
8th month=20+19+17/3=56/3=18.6
9th month =19+17+18=54/3=18
10 month = 17+18+19/3=18
first method for 11 month calculations= If it is 3 month moving periods, 8 + 9+ 10 = 18 + 19 + 21 /3 =19.3
Second Method for 11 month calculations = Forecasting methods to forecast periods 4 month, 7+ 8 + 9+ 10/4 =17+18+19+21/4=18.75(sales)
3 month moving period is better =19.3 sales.
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