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South Coast Hardware in St. Mary's, Antigua is trying to determine the amount of sales lost while it was shut down because of summer floods
South Coast Hardware in St. Mary's, Antigua is trying to determine the amount of sales lost while it was shut down because of summer floods in 2020. Sales data for March through August are shown in Table 3 below: Month March April May June July August Table 3 Sales ($1,000s) 371.44 335.68 410.22 420.72 511.14 522.38 a. Redraw the table and include another column by computing forecasts using exponential smoothing, with a = 0.4, to develop a forecast for August and September. Show all working for calculations. (Hint: Use the forecast for September as the actual sales in September in developing the October forecast.) Comment on the use of exponential smoothing for forecasting more than one period into the future. (12 marks) b. By redrawing the above table, use linear trend projection to forecast sales for September and October. (12 marks) c. South Coast's insurance company proposed a settlement based on lost sales of $800,000 in September and October. Is this amount fair? If not, what amount would you counter with? (6 marks)
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