Monthly sales of storage sheds at Wallace Garden supply are shown in the following table. Using the 3-month moving average forecasting method (simple average), what is your forecast of December sales? Actual Month Sales January February March April May June July August September October November December? O 15.2 16.7 20.67 None of the above 10 12 16 13 17 19 15 20 22 19 21
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- Refer to the gasoline sales time series data in Table 8.1. Compute four-week and five-week moving averages for the time series. Compute the MSE for the four-week and five-week moving average forecasts. What appears to be the best number of weeks of past data (three, four, or five) to use in the moving average computation? Recall that the MSE for the three-week moving average is 10.22.Ranger Industries has provided the following information at June 30: Other information: Average selling price, 196 Average purchase price per unit, 110 Desired ending inventory, 40% of next months unit sales Collections from customers: In month of sale20% In month after sale50% Two months after sale30% Projected cash payments: Inventory purchases are paid for in the month following acquisition. Variable cash expenses, other than inventory, are equal to 25% of each months sales and are paid in the month of sale. Fixed cash expenses are 40,000 per month and are paid in the month incurred. Depreciation on equipment is 2,000 per month. REQUIREMENT You have been asked to prepare a master budget for the upcoming quarter (July, August, and September). The components of this budget are a monthly sales budget, a monthly purchases budget, a monthly cash budget, a forecasted income statement for the quarter, and a forecasted September 30 balance sheet. The worksheet MASTER has been provided to assist you. Ranger Industries desires to maintain a minimum cash balance of 8,000 at the end of each month. If this goal cannot be met, the company borrows the exact amount needed to reach its goal. If the company has a cash balance greater than 8,000 and also has loans payable outstanding, the amount in excess of 8,000 is paid to the bank. Annual interest of 18% is paid on a monthly basis on the outstanding balance.The quarterly sales data (number of copies sold) for a college textbook over the past three years are as follows: a. Construct a time series plot. What type of pattern exists in the data? b. Use a regression model with dummy variables as follows to develop an equation to account for seasonal effects in the data: Qtr1 = l if quarter l, 0 otherwise; Qtr2 = l if quarter 2, 0 otherwise; Qtr3 = 1 if quarter 3, 0 otherwise. c. Based on the model you developed in part (b), compute the quarterly forecasts for next year. d. Let t = 1 to refer to the observation in quarter 1 of year 1; t = 2 to refer to the observation in quarter 2 of year 1; ; and t = 12 to refer to the observation in quarter 4 of year 3. Using the dummy variables defined in part (b) and t, develop an equation to account for seasonal effects and any linear trend in the time series. e. Based upon the seasonal effects in the data and linear trend, compute the quarterly forecasts for next year. f. Is the model you developed in part (b) or the model you developed in part (d) more effective? Justify your answer.
- Using the following Quarterly Sales Demand Data; read and answer the questions listed below. Quarter # Actual Sales (dollars) 1 1416 2 1398 3 1274 4 1167 Calculate the average quarterly Seasonal Index value? (rounded to 2 decimal places). Calculate the total sales if there is a 35% total annual sales decrease next year? (rounded to the nearest whole number) Calculate the Seasonal Index value for Quarter 3? (rounded to 2 decimal places)The monthly sales for Yazici Batteries, Inc., were asfollows: a) Plot the monthly sales data.b) Forecast January sales using each of the following:i) Naive method.ii) A 3-month moving average.iii) A 6-month weighted average using .1, .1, .1, .2, .2, and .3,with the heaviest weights applied to the most recent months.iv) Exponential smoothing using an a = .3 and a Septemberforecast of 18.v) A trend projection. c) With the data given, which method would allow you to fore-cast next March’s sales?The following monthly sales (in thousands of AUS dollars) of chocolate boxes have been recorded for January, February, March, and April, respectively: 8, 8, 5, 9. Focusing on sales forecast accuracy for the month of April only, explain which of the following forecasting method would you recommend: the Naïve method, the Average method, or the Simple exponential smoothing method (assuming alpha=0.8 and initial state of 7)?
- QWE Inn has recorded the following number of rooms sold for the first quarter of the year: January 2100 February 2500 March 2550 Assume that you found an average monthly geometric rate of change in rooms sales from the month of January to March be equal to 5%. What would be your forecast of rooms sales for the month of April if sales are expected to continue increasing at the same rate?The following table shows a tool and dies company’s quarterly sales for the current year. What sales would you predict for the first quarter of next year? Quarter relatives are SR1= 1.10, SR2 = 0.99, SR3 = 0.90, and SR4 = 1.01.Quarter 1 2 3 4Sales 236.50 227.70 220.50 262.60Valley's managers have made the following additional assumptions and estimates: Estimated sales for July and August are $345,000 and $315,000 respectively Each month's sales are 20% cash sales and 80% credit sales. Each month's credit sales are collected 30% in the month of the sale and 70% in the month following the sale. All of the accounts receivable at June 30 will be collected in July Each month's ending inventory must equal 20% of the cost of the next month's sales. The Cost of Goods Sold is 60% of sales. The company pays for 40% of its merchandise purchases in the month of the purchase and the remaining 60% in the month following the purchase. All of the accounts payable at June 30 will be paid in July Monthly selling and administrative expenses are always $75,000. Each month $10,000 of this total amount is depreciation expense and the remaining $65,000 relates to expenses that are paid in the month they are incurred The company does not plan to buy or…
- Valley's managers have made the following additional assumptions and estimates: Estimated sales for July and August are $345,000 and $315,000 respectively Each month's sales are 20% cash sales and 80% credit sales. Each month's credit sales are collected 30% in the month of the sale and 70% in the month following the sale. All of the accounts receivable at June 30 will be collected in July Each month's ending inventory must equal 20% of the cost of the next month's sales. The Cost of Goods Sold is 60% of sales. The company pays for 40% of its merchandise purchases in the month of the purchase and the remaining 60% in the month following the purchase. All of the accounts payable at June 30 will be paid in July Monthly selling and administrative expenses are always $75,000. Each month $10,000 of this total amount is depreciation expense and the remaining $65,000 relates to expenses that are paid in the month they are incurred The company does not plan to buy or sell any plant and…Valley's managers have made the following additional assumptions and estimates: Estimated sales for July and August are $345,000 and $315,000 respectively Each month's sales are 20% cash sales and 80% credit sales. Each month's credit sales are collected 30% in the month of the sale and 70% in the month following the sale. All of the accounts receivable at June 30 will be collected in July Each month's ending inventory must equal 20% of the cost of the next month's sales. The Cost of Goods Sold is 60% of sales. The company pays for 40% of its merchandise purchases in the month of the purchase and the remaining 60% in the month following the purchase. All of the accounts payable at June 30 will be paid in July Monthly selling and administrative expenses are always $75,000. Each month $10,000 of this total amount is depreciation expense and the remaining $65,000 relates to expenses that are paid in the month they are incurred The company does not plan to buy or…Valley's managers have made the following additional assumptions and estimates: Estimated sales for July and August are $345,000 and $315,000 respectively Each month's sales are 20% cash sales and 80% credit sales. Each month's credit sales are collected 30% in the month of the sale and 70% in the month following the sale. All of the accounts receivable at June 30 will be collected in July Each month's ending inventory must equal 20% of the cost of the next month's sales. The Cost of Goods Sold is 60% of sales. The company pays for 40% of its merchandise purchases in the month of the purchase and the remaining 60% in the month following the purchase. All of the accounts payable at June 30 will be paid in July Monthly selling and administrative expenses are always $75,000. Each month $10,000 of this total amount is depreciation expense and the remaining $65,000 relates to expenses that are paid in the month they are incurred The company does not plan to buy or…