Ms. Winnie Lin’s company sells computers. Monthly sales for a six-month period are as follows:

MONTH SALES Jan 18,000 Feb 22,000 Mar 16,000 Apr 18,000 May 20,000 Jun 24,000

a. Plot the monthly data on a sheet of graph paper.

b. Compute the sales forecast for July using the following approaches: (1) a four-month moving average; (2) a weighted three-month moving average using .50 for June, .30 for May and .20 for April; (3) a linear trend equation (4) exponential smoothing with α (smoothing constant) equal to .40, assuming a February forecast of 18,000

c. Which method do you think is the least appropriate? Why?