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Week 2 Discussion Problem

# Week 2 Discussion Problem - Daddy Company’s historical...

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AC556 Week 2 Discussion Problem Sales Forecasting NOTE: It is expected that this problem will be completed using an Excel spreadsheet using formulas. Please see the Excel Tutorial that is available under the course home tab. The Big Daddy Company has gathered information regarding past sales: Year Sales 2001 \$ 450,000 2002 340,000 2003 482,000 2004 970,000 2005 800,000 2006 1,000,000 2007 1,250,000 Required: 1. Predict the sales for 2008 using the moving average method. 2. You noticed a sudden jump in sales in 2004. After inquiring about this jump, you were told that there was a one-time sale for \$250,000 in that year that is not likely to be repeated. What revision, if any, would you make in the sales information used for projection? 3. If you revised you historical sales to be used to project 2008sales, recalculate your projection using the moving average method. 4. Which projection (question 1 or question 3) do you feel is more representative of the Big

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Unformatted text preview: Daddy Company’s historical sales? Why? Please complete the remaining questions using the revised historical data. 5. Predict the sales for 2008 using exponential smoothing. 6. Predict the sales for 2008 using a trend line technique using. (GROWTH function in Excel). 7. Predict the sales for 2008 using a graphing technique. 8. It has been suggested that sales for the company may be connected to disposal income. Using the information below regarding historical disposable income, predict the sale for 2008 using regression analysis if a reliable prediction for disposable income for 2008 is \$53,003. Year Disposable Income 2001 \$36,285 2002 39,582 2003 40,734 2004 44,760 2005 49,581 2006 53,849 2007 54,091 9. Which method do you think provides the most realistic sales projections for 2008? Why?...
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