15. The general sales manager at Knox Products Corporation has just received next year’s sales forecast

(in units) for two of the firm’s major products (Less Knox and More Knox) from sales managers of the Eastern and Western sales regions:

Eastern Region Forecast Western Region Forecast Less Knox More Knox Less Knox More Knox 150 300 300 450 Less Knox sells for $4.50 per unit and More Knox sells for $8.50 per unit.

a. The corporate economist has forecast a total corporation-wide sales volume for these two products of $11,000 for next year. What’s the disparity between the two forecasts at the item level?

b. If top management agrees to a total corporation-wide sales forecast volume of $9,000, what’s the sales forecast at the item level?

16. The Gonzales Electric Company’s 12 products are further grouped into four product families.

Products A, B, and C compose family l; D, E, and F compose family 2; G, H, and I compose family 3; and products J, K, and L make up family 4. Dick Gonzales has the following exponential smoothing forecasts of monthly demand for each product.

Family Product Forecast $/Unit Family Product Forecast $/Unit 1 A 10 1,000 3 G 100 250 B 15 1,200 H 180 100 C 20 900 I 220 100 2 D 5 5,000 4 J 2 10,000 E 3 7,000 K 4 9,000 F 2 9,000 L 3 8,000 Gonzales’s sales force has also come up with the monthly forecasts of sales for each product family.

Family $ Sales 1 50,000 2 50,000 3 75,000 4 75,000

a. Roll up the individual product forecasts and compare them to the forecast provided by the sales force. Using a spreadsheet, roll down the forecast to make the individual item forecast agree with the sales force forecast. Calculate dollar value and number of units in the individual item forecast.

b. Top management has independently decided to set a $300,000 overall monthly sales goal for the company. Adjust the sales force forecast to reflect this new goal; then roll down the forecast to the individual item level. Calculate dollar value and number of units in the individual item forecast.