Question

Suppose that you are using the naïve forecasting method with trend to forecast sales. If sales have been declining by 20% per week, and this week's sales amounted to $200, what would your forecast be for next week?

A) $200
B) $ 40
C) $240
D) $180
E) $160

Answer 1

E) $160

Step-by-step explanation:

The computation is presented below:

Given that

Sales declining percentage = 20%

And this week the sales amounted to $200

So, by considering the above information, the forecast for the next week is

= Sales for this week - sales for this week × Sales declining percentage

= $200 - $200 × 20%

= $200 - $40

= $160