Construct a time series plot. What type of pattern exists? Develop a forecast for the next month using the averaging method. Develop a forecast for the next month using the naïve last-value method. Consider the following set of time series sales data for a growing company over thepast 8 months:MonthSales11513318422202372221

The time series plot shows a horizontal pattern.

Answered: Consider the following set of time…

Consider the following set of time series sales data for a growing company over the past 8 months: Month Sales 1 15 13 3 18 4 22 20 23 7 22 21

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter13: Regression And Forecasting Models

Section13.3: Simple Regression Models

Problem 5P: Management of a home appliance store wants to understand the growth pattern of the monthly sales of...

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Concept explainers

Forecasting in Business

Forecasting is the process of predicting the future based on the past and the present data and circumstances. In other words, forecasting is the act of making a detailed analysis of future events based on the decisions made in the past as well as the present. Forecasting plays a very important role in operational management as it helps in planning and decision-making. It is not only important for the success of a business but also contributes to individual growth and success. Many business organizations or companies have failed due to the shortcomings of their forecasting.

Question

Construct a time series plot. What type of pattern exists?
Develop a forecast for the next month using the averaging method.
Develop a forecast for the next month using the naïve last-value method.

Consider the following set of time series sales data for a growing company over the
past 8 months:
Month
Sales
1
15
13
3
18
4
22
20
23
7
22
21

Leveraging special tenchniques in analyzing historical data to predict future trends. Forecasting covers the methods and types of forecasting and their application to case studies.

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1. Time series plot:

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2. 3-Period moving average:

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3. Naïve forecasting:

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