a. If Growth of Sales Remains Constant then
Average=Sum of All Quaters/4
|
|
2003 |
2004 |
2005 |
2006 |
2007 |
2008 |
2009 |
|
Quarter 1 |
1200 |
1,300 |
1,400 |
1500 |
1600 |
1700 |
1800 |
|
Quarter 2 |
800 |
800 |
800 |
800 |
800 |
800 |
800 |
|
Quarter 3 |
200 |
250 |
300 |
350 |
400 |
450 |
1350 |
|
Quarter 4 |
1,000 |
1,200 |
1,400 |
1,600 |
1,800 |
2,000 |
2,200 |
|
Average |
800 |
888 |
975 |
1062.5 |
1,150 |
1,238 |
1,325 |
Sales of 3rd Quater of 2009
(1800+2000)/2=1900
(1900+800)/2=1350.
b.St=axt-1+(1-a)t-1
Alpha is 0
=800(0)+1-0
=1
or
Alpha Is 1
800(1)+1-1
=800
If Alpha is 0.8
=800(0.8)+1-0.8
=640.2
d. Exponential Smoothing Is Inaccurate in Claytons Situations as
based on constant growth across all quaters and years is 500 for
3rd Quater of 2009.and Exponential Smoothing provides figures of
1,800,640.2.Moving Average Shows A Value of 1350 instead of
500.
Moving Average and Exponential Smoothing Fail in the following
Situations-
a.Exponential Smoothing Fails if Alpha Is Close to 0.
b.Moving Average Doesn't Take into Account Seasonal
variations,
