a. Plot the monthly data. b. Forecast September sales volume using the following: 1) A linear regression 2) A 6-month moving average 3) Exponential smoothing with a smoothing constant equal to 0.20 and assuming a March forecast of 600,000. 4) The naïve approach 5) A weighted average using 0.7 for Dec, 0.2 for November and 0.1 for October. 6) Correlation Which mothod in hl the MOST appropriate method to be used? Why?
a. Plot the monthly data. b. Forecast September sales volume using the following: 1) A linear regression 2) A 6-month moving average 3) Exponential smoothing with a smoothing constant equal to 0.20 and assuming a March forecast of 600,000. 4) The naïve approach 5) A weighted average using 0.7 for Dec, 0.2 for November and 0.1 for October. 6) Correlation Which mothod in hl the MOST appropriate method to be used? Why?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Concept explainers
Risk and return
Before understanding the concept of Risk and Return in Financial Management, understanding the two-concept Risk and return individually is necessary.
Capital Asset Pricing Model
Capital asset pricing model, also known as CAPM, shows the relationship between the expected return of the investment and the market at risk. This concept is basically used particularly in the case of stocks or shares. It is also used across finance for pricing assets that have higher risk identity and for evaluating the expected returns for the assets given the risk of those assets and also the cost of capital.
Question
![3. Covid Co. has the following monthly sales in 2020:
Sales (000 units)
Month
Sales (000 units)
Month
January
567
July
522
February
231
August
752
March
610
September
645
April
309
October
229
May
736
November
456
June
380
December
700
a. Plot the monthly data.
b. Forecast September sales volume using the following: 1) A linear regression 2) A
6-month moving average 3) Exponential smoothing with a smoothing constant
equal to 0.20 and assuming a March forecast of 600,000. 4) The naïve approach 5) A
weighted average using 0.7 for Dec, 0.2 for November and 0.1 for October. 6)
Correlation
c. Which method in b) is the MOST appropriate method to be used? Why?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fc47b8794-c2f2-4d04-9fad-4e8825beb778%2F83b14617-94e4-47c4-8671-779a904734d8%2Fbmkhit_processed.png&w=3840&q=75)
Transcribed Image Text:3. Covid Co. has the following monthly sales in 2020:
Sales (000 units)
Month
Sales (000 units)
Month
January
567
July
522
February
231
August
752
March
610
September
645
April
309
October
229
May
736
November
456
June
380
December
700
a. Plot the monthly data.
b. Forecast September sales volume using the following: 1) A linear regression 2) A
6-month moving average 3) Exponential smoothing with a smoothing constant
equal to 0.20 and assuming a March forecast of 600,000. 4) The naïve approach 5) A
weighted average using 0.7 for Dec, 0.2 for November and 0.1 for October. 6)
Correlation
c. Which method in b) is the MOST appropriate method to be used? Why?
Expert Solution
![](/static/compass_v2/shared-icons/check-mark.png)
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps with 2 images
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
![FINANCIAL ACCOUNTING](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9781259964947/9781259964947_smallCoverImage.jpg)
![Accounting](https://www.bartleby.com/isbn_cover_images/9781337272094/9781337272094_smallCoverImage.gif)
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
![Accounting Information Systems](https://www.bartleby.com/isbn_cover_images/9781337619202/9781337619202_smallCoverImage.gif)
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
![FINANCIAL ACCOUNTING](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9781259964947/9781259964947_smallCoverImage.jpg)
![Accounting](https://www.bartleby.com/isbn_cover_images/9781337272094/9781337272094_smallCoverImage.gif)
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
![Accounting Information Systems](https://www.bartleby.com/isbn_cover_images/9781337619202/9781337619202_smallCoverImage.gif)
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
![Horngren's Cost Accounting: A Managerial Emphasis…](https://www.bartleby.com/isbn_cover_images/9780134475585/9780134475585_smallCoverImage.gif)
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
![Intermediate Accounting](https://www.bartleby.com/isbn_cover_images/9781259722660/9781259722660_smallCoverImage.gif)
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
![Financial and Managerial Accounting](https://www.bartleby.com/isbn_cover_images/9781259726705/9781259726705_smallCoverImage.gif)
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education