Question

The sales in the three previous Aprils were 240, 290, and 250 (in 1000s of units). The average over all months (Jan-Dec) for the same three years is 500 (in 1000s of units). Calculate the seasonal index for April (to two decimal places). To predict sales for next year (Year 4), vou decided to use the trend projection method. Your calculations based upon ANNUAL sales yielded the following: A y-intercept

(a) of 5,500, with a slope
(b) of -40
Using this, calculate the forecast for next year's total unit sales (in 000s). Assume that you calculated a seasonal index for September of 1.5 and a forecast for next year of 3,000,000 units. (Ignore the prior parts of the problem.) Make a forecast for September sales for next year using the seasonal method we have learned?

Answer 1

The seasonal index for April is 0.52. The forecast for next year's total unit sales is 5340 thousand units. The forecast for September sales for next year using the seasonal method is 4500000 units.

Step-by-step explanation:

To calculate the seasonal index for April, you need to find the average sales for April and divide it by the average sales for all months (Jan-Dec). The average sales for April is (240+290+250)/3 = 260 (in 1000s of units). The average sales for all months is 500 (in 1000s of units), so the seasonal index for April is 260/500 = 0.52 (rounded to two decimal places).

To calculate the forecast for next year's total unit sales using the trend projection method, you can use the formula: Forecast = a + b * X, where a is the y-intercept, b is the slope, and X is the year. In this case, a = 5500, b = -40, and X = 4 (next year). Plugging in the values, the forecast for next year's total unit sales is 5500 + (-40) * 4 = 5340 thousand units.

To make a forecast for September sales for next year using the seasonal method, you can multiply the forecast for next year's total unit sales by the seasonal index for September. In this case, the forecast for next year is 3000000 units and the seasonal index for September is 1.5. Multiplying these values, the forecast for September sales for next year is 3000000 * 1.5 = 4500000 units.