January 16, 2018
###### Appraisal cost for quality
January 16, 2018

Assume that your stock of sales merchandise is maintained based on the forecast demand. If the distributor’s sales personnel call on the first day of each month, compute your forecast sales by each of the three methods requested here.

 ACTUAL June 132 July 172 August 200
 a. Using a simple three-month moving average, what is the forecast for September? (Round your answer to 2 decimal places.)

 Forecast for September

 b. Using a weighted moving average, what is the forecast for September with weights of 0.10, 0.20, and 0.70 for June, July, and August, respectively? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

 Forecast for September
 c. Using single exponential smoothing and assuming that the forecast for June had been 128, forecast sales for September with a smoothing constant alpha of 0.30. (Round your answer to 2 decimal places.)

Forecast for September

 Actual demand for a product for the past three months was
 Three months ago 385 units Two months ago 335 units Last month 290 units
 a. Using a simple three-month moving average, make a forecast for this month. (Round your answer to the nearest whole number.)
 Forecast for this month units
 b. If 285 units were actually demanded this month, what would your forecast be for next month, again using a 3-month moving average? (Round your answer to the nearest whole number.)
 Forecast for the next month units
 c. Using simple exponential smoothing, what would your forecast be for this month if the exponentially smoothed forecast for three months ago was 435 units and the smoothing constant was 0.40? (Round your answer to the nearest whole number.)
 Forecast for this month units
 Here are the data for the past 21 months for actual sales of a particular product:
 LAST YEAR THIS YEAR January 325 260 February 440 380 March 450 370 April 440 420 May 380 440 June 460 360 July 410 375 August 370 300 September 345 380 October 510 November 560 December 540
 Develop a forecast for the fourth quarter using a three-quarter, weighted moving average. Weight the most recent quarter 0.50, the second most recent 0.25, and the third 0.25. Do the problem using quarters, as opposed to forecasting separate months. (Round your answer to 2 decimal places.)
 Forecast for the fourth quarter

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