Bell Greenhouses has estimated its monthly
where
Assume this trend factor is expected to remain stable in the foreseeable future. The following table contains the monthly seasonal adjustment factors, which have been estimated using actual sales data from the past five years:
Forecast Bell Greenhouses’ demand for potting soil in March, June, August, and December 2007.- If the following table shows the forecasted and actual potting soil sales by Bell Greenhouses for April in five different years, determine the seasonal adjustment factor to be used in making an April 2008 forecast.
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- Metropolitan Hospital has estimated its average monthly bed needs as N=1,000+9X where X=timeperiod(months);January2002=0 N=monthlybedneeds Assume that no new hospital additions are expected in the area in the foreseeable future. The following monthly seasonal adjustment factors have been estimated, using data from the past five years: Forecast Metropolitans bed demand for January, April, July, November, and December 2007. If the following actual and forecast values for June bed demands have been recorded, what seasonal adjustment factor would you recommend be used in making future June forecasts?arrow_forwardAD has estimated the following demand relationship for its product over the last four years, using monthly observations: ln Qt = 4.932- 1.238 ln Pt + 1.524 ln Yt-1 + 0.4865lnQt-1(2.54) (1.38) (3.65) (2.87)R2= 0.8738where Q = sales in units, P = price in Rs., Y is income in Rs,000, and the numbers in brackets are t-statistics.a. Interpret the above model.b. Make a sales forecast if price is Rs. 9, income last month was Rs. 25,000 and sales last month were 2,981 units.c. Make a sales forecast for the following month if there is no change in price or income.d. If price is increased by 5 per cent in general terms, estimate the effect on sales, stating any assumptions.arrow_forwardBell Greenhouses has estimated its monthly demand for potting soil to be the following: Assume this trend factor is expected to remain stable in the foreseeable future. The following table contains the monthly seasonal adjustment factors, which have been estimated using actual sales data from the past five years: MONTH ADJUSTMENT FACTOR (%) March +2 June +15 August +10 December −12 a. Forecast Bell Greenhouses’ demand for potting soil in March, June, August, and December 2007. Answer b. If the following table shows the forecasted and actual potting soil sales by Bell Greenhouses for April in five different years, determine the seasonal adjustment factor to be used in making an April 2008 forecast. YEAR FORECAST ACTUAL 2007 500 515 2006 452 438 2005 404 420 2004 356 380 2003 308 320arrow_forward
- A company selling widgets has found that the number of items sold, x, depends upon the price, p at 90000 which they're sold, according the equation z = (0.6p + 1)? Due to inflation and increasing health benefit costs, the company has been increasing the price by $0.06 per month. Find the rate at which revenue is changing when the company is selling widgets at $8 each. Revenue is decreasing by dollars per month Hint: Give your answer as a positive value.arrow_forwardMetropolitan Hospital has estimated its average monthly bed needs, N, as: N = 460 + 9X where X = time period (months); (January 2002 = 0) Assume that no new hospital additions are expected in the area in the foreseeable future. The following monthly seasonal adjustment factors have been estimated, using data from the past five years: Forecast Metropolitan's bed demand for January, April, July, November, and December 2007. Month Adjustment Factor (%) Forecast January +5 April -15 July +4 November -5 December -25 Suppose the following actual and forecast values for June bed demands have been recorded. Year Forecast Actual 2007 1,045 1,139 2006 937 974 2005 829 895 2004 721 743 2003 613 656 2002 505 515 What seasonal adjustment factor would you recommend be used in making future June forecasts? O 5.5% O 0.2% O 2.3%arrow_forwardkad has estimated the following demand relationship for its product over the last four years, using monthly observations: ln qt = 4.932- 1.238 ln pt + 1.524 ln yt-1 + 0.4865ln qt-1 (2.54) (1.38) (3.65) (2.87) r 2= 0.8738 where q = sales in units, p = price in rs., y is income in rs,000, and the numbers in brackets are t-statistics. a. interpret the above model. b. make a sales forecast if price is rs. 9, income last month was rs. 25,000 and sales last month were 2,981 units. c. make a sales forecast for the following month if there is no change in price or income. d. if price is increased by 5 per cent in general terms, estimate the effect on sales, stating any assumptions.arrow_forward
- 3 Metropolitan Hospital has estimated its average monthly bed needs as MONTH January Assume that no new hospital additions are expected in the area in the foreseeable future. The following monthly seasonal adjustment factors have been estimated, using data from the past five years: April July November December N = 1,000+ 9X where X = time period (months); January 2002 = 0 N = monthly bed needs ADJUSTMENT FACTOR (%) +5 -15 +4 -5 -25 a. Forecast Metropolitan's bed demand for January, April, July, November, and December 2007.arrow_forwardAt the beginning of this year, daily consumption of gasoline in the US amounted to 344 million gallons. It is estimated that for every 10%10% increase in the price of gasoline, quantity demanded falls by 2.5%. By the end of this year, the price of gasoline is expected to increase by 40 cents from $2.852.85 per gallon. Based on this information, what is the expected quantity demanded (QD) for gasoline at the end of this year? Please specify your answer to one decimal place. Expected QD : millions of gallonsarrow_forwardAt the beginning of this year, daily consumption of gasoline in the US amounted to 344 million gallons. It is estimated that for every 10%10% increase in the price of gasoline, quantity demanded falls by 2.0%. By the end of this year, the price of gasoline is expected to increase by 40 cents from $3.103.10 per gallon. Based on this information, what is the expected quantity demanded (QD) for gasoline at the end of this year? Please specify your answer to one decimal place.arrow_forward
- ABC,Inc., is a leading manufacturer to tufted carpeting under the Ironside brand. During the past year, Ironside sold 16 million square yards (units) of carpeting at average wholesale price of Rs.8.75 per unit. This year, disposable income per capita is expected to surge from Rs.26670 to Rs.29000 in a booming economic recovery. Without any price change, Ironsides marketing director expects current-year sales to rise to 25 million units. In an effort to reduce excess end-of-the-model-year inventory, ABC,Inc. offered a 3.5% discount off the average price of tufted carpeting under the Ironside brand sold during the month of August. Customer response was enthusiastic, with unit sales rising by 12% over the previous months level in result of the price decrease.Calculate the income arc elasticity of demand. Calculate the point price elasticity of demand for tufted carpeting. (Hint: Use ΔQ=12%)arrow_forwardABC,Inc., is a leading manufacturer to tufted carpeting under the Ironside brand. During the past year, Ironside sold 16 million square yards (units) of carpeting at average wholesale price of Rs.8.75 per unit. This year, disposable income per capita is expected to surge from Rs.26670 to Rs.29000 in a booming economic recovery. Without any price change, Ironsides marketing director expects current-year sales to rise to 25 million units. In an effort to reduce excess end-of-the-model-year inventory, ABC,Inc. offered a 3.5% discount off the average price of tufted carpeting under the Ironside brand sold during the month of August. Customer response was enthusiastic, with unit sales rising by 12% over the previous months level in result of the price decrease.Calculate the income arc elasticity of demand.arrow_forwardABC,Inc., is a leading manufacturer to tufted carpeting under the Ironside brand. During the past year, Ironside sold 16 million square yards (units) of carpeting at average wholesale price of Rs.8.75 per unit. This year, disposable income per capita is expected to surge from Rs.26670 to Rs.29000 in a booming economic recovery. Without any price change, Ironsides marketing director expects current-year sales to rise to 25 million units. In an effort to reduce excess end-of-the-model-year inventory, ABC,Inc. offered a 3.5% discount off the average price of tufted carpeting under the Ironside brand sold during the month of August. Customer response was enthusiastic, with unit sales rising by 12% over the previous months level in result of the price decrease.Calculate the point price elasticity of demand.arrow_forward
- Managerial Economics: Applications, Strategies an...EconomicsISBN:9781305506381Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. HarrisPublisher:Cengage Learning