Question

1. In the past, Christopher Morrison’s tire dealership in Cincinnati sold an average of 3,200 tires every year. In the past 2 years, 900 and 1000, respectively, were sold in fall, 1500 and 1400 in winter, 400 and 350 in spring and 400 and 450. With a major expansion planned, Christopher forecasts sales next year to increase to 4,000 tires. What will be the demand during each of the FOUR seasons of next year?

Answer 1

Step-by-step explanation:

Seasonality = average of a season in the past two years/average per season

Average per year = 3200 tires

Average per season = 3200/4 = 800

Sales in Fall = 900 and 1000. Average sold in fall = (900 + 1000)/2 = 950

Sales in winter = 1500 and 1400. Average sold in winter = (1500 + 1400)/2 = 1450

Sales in spring = 400 and 350. Average sold in spring = (400 + 350)/2 = 375

Sales in Summer = 400 and 450. Average sold in Summer = (400 + 450)/2 = 425

Seasonality of Fall = average sold in fall/average per season = 950/800 = 1.1875

Seasonality of winter = 1450/800 = 1.8125

Seasonality of spring = 375/800 = 0.46875

Seasonality of summer = 425/800 = 0.53125

Sales next year = 4000 tires

Average per season = 1000 tires

Seasonal forecast = average per season * seasonality

Forecast for each season:

Fall: 1000×1.1875 = 1187.5 tires

Winter: 1000×1.8125 = 1812.5

Spring: 1000×0.46875 = 468.75

Summer: 1000×0.53125 = 531.25

Rounding off the forecast to whole numbers Fall will be 1188, Winter 1813 Spring 469 and Summer 531