Scenario: Sales Forecasting

The Simpson Corporation has gathered information regarding past sales of custom t-shirts.

YearSales2013$225,0002014$193,0002015$248,0002016$360,0002017$340,0002018$295,0002019$310,000

Assignment Details

Important!

It is expected that the assignment will be completed using an Excel spreadsheet using formulas.

Answer the following questions.

1. Predict the sales for 2020 using the moving average method.
2. You noticed a sudden jump in sales for 2016. After inquiring about this jump, you were notified by your manager about a one-time special order sale for $60,000 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 your historical sales to be used to project 2020 sales, please recalculate your projection using the moving average method.
4. Which projection (Question 1 or Question 3) do you feel is more representative of the Simpson Corporation's historical sales? Why?
5. Please complete the remaining questions using the revised historical data.
6. Predict the 2020 sales using exponential smoothing.
7. Predict the 2020 using a trend line technique using (GROWTH function in Excel).
8. Predict the sales for 2020 using a graphing technique.
9. It has been suggested that sales for the company may be connected to disposable income. Using the information below regarding historical disposable income, predict the sales for 2020 using regression analysis if a reliable prediction for disposable income for 2020 is $21,200.
10. Year Disposable Income
11. 2013$18,0002014$18,6182015$19,0992016$24,4532017$24,9062018$20,3882019$21,425
12. Which method do you think provides the most realistic sales projections for 2020? Why?