Project Management (MIIE 3240)

Practical Exercise

Linear Trend Method of Forecasting

Equation
Ft= a + bt

Ft = Forecast for period

a =Value of Ft at t=0
b = Slope of the line
t =Specific number of time periods.

Week Unit Sales

Problem 1:
1 700
Car batteries sales for a California based firm over the past 14
weeks are shown in the table below. Plot the data and visually 2 724
check to see if a linear trend line would be appropriate. 3 720
1) Determine the equation of the trend line, and predict the
4 728
sales for 11, 12 and 25th week.
2) 3 week Simple moving average and forecast for 15th week. 5 740
3) Exponential smoothing of α=0.3 and forecast for 15th week. 6 742
4) Suggest the best method of forecasting cars battery sales
7 758
using the given data.
8 750
9 770
10 775
11 650
12 640
13 600
14 680

Problem 2:
A Sales manager has been monitoring the sales of a certain product of vehicle engine oil. Daily sales
during the last 15 days were as follows:
1) Use Naïve forecast method to forecast 16th day.
 2) Forecast the sale for 20, 23 and 31st day.
2) 5 week Simple moving average and forecast for 16th day.
3) Exponential smoothing of α=0.3 and forecast for 16th day.
4) Suggest the best method to forecast this data.

Day Number Sold

1 36
2 38
3 42
4 44
5 48
6 49
7 50
8 49
9 52
10 48
11 52
12 55
13 54
14 56
15 57