Week 2 Homework Assignment - 1. We average the sales from...

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1. We average the sales from al previous years to predict the sales in 2006. Original Series Year Sales 1999 $300,000 2000 225,000 2001 325,000 2002 650,000 2003 540,000 2004 675,000 2005 825,000 2006 505,714 2. To account for the non-repeating $200,000 sale in 2002, we subtract $200,000 from the sales in 2002. Revised Series Year Sales 1999 $300,000 2000 $225,000 2001 $325,000 2002 $450,000 2003 $540,000 2004 $675,000 2005 $825,000 3. We average the sales from al previous years (including the revised number for 2002) to predict the sales in 2006. Revised Series Year Sales 1999 $300,000 2000 $225,000 2001 $325,000 2002 $450,000 2003 $540,000 2004 $675,000 2005 $825,000 2006 477,143 4. The projection from question 3 is more representative of the company's sales because it excludes a non-repeating sale. The sales data is more representative of a real trend over time when one-off events are excluded. 5. Here we used exponential smoothing with a damping value of 0.25.
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This note was uploaded on 01/29/2012 for the course ACCOUNTING 556 taught by Professor Unknown during the Spring '11 term at Keller Graduate School of Management.

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