# National Scan Inc sells radio frequency inventory tags

National Scan, Inc., sells radio frequency inventory tags. Monthly sales for a seven-month period were as follows:

Month Sales (000 units)
Feb. 19
Mar. 18
Apr. 15
May 20
June 18
July 22
Aug. 20

Required: Forecast September sales volume using each of the following:

a. The naive approach
b. A five-month moving average
c. A weighted average using 0.60 for August, 0.30 for July, and 0.10 for June
d. Exponential smoothing with a smoothing constant equal to 0.20, assuming previous forecast of 19(000).

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1. a. The Naive Approach The naive approach assumes that the sales for September will be the same as the sales for August.

b. A Five-Month Moving Average To calculate a five-month moving average, we take the average of the sales of the last five months (April through August).

c. A Weighted Average For the weighted average, we use the given weights: 0.60 for August, 0.30 for July, and 0.10 for June.

d. Exponential Smoothing For exponential smoothing with a smoothing constant of 0.20 and a previous forecast of 19(000):

Forecast for September=α×(Sales in Aug)+(1α)×(Previous Forecast)

### Summary of Forecasts:

• Naive Approach: 20
• Five-Month Moving Average: 19
• Weighted Average: 20.4
• Exponential Smoothing: 19.2