The owner of Darkest Tans Unlimited in a local mall is forecasting this month's (October's) demand for the one new tanning booth based on the following historical data: $$\begin{array} { | l | c | }
\hline{ \text { Month } } & \text { Number of Visits } \
\hline \text { April } & 100 \
\hline \text { May } & 140 \
\hline \text { June } & 110 \
\hline \text { July } & 150 \
\hline \text { August } & 120 \
\hline \text { September } & 160 \
\hline
\end{array}$$
What is this month's forecast using the naive approach?
A) 100
B) 160
C) 130
D) 140
E) 120

Question

The owner of Darkest Tans Unlimited in a local mall is forecasting this month's (October's) demand for the one new tanning booth based on the following historical data: $$\begin{array} { | l | c | } 
\hline{ \text { Month } } & \text { Number of Visits } \
\hline \text { April } & 100 \
\hline \text { May } & 140 \
\hline \text { June } & 110 \
\hline \text { July } & 150 \
\hline \text { August } & 120 \
\hline \text { September } & 160 \
\hline
\end{array}$$
What is this month's forecast using the naive approach?
A) 100
B) 160
C) 130
D) 140
E) 120

Quizplus · Accepted Answer

The naive approach assumes that the demand in the current month will be the same as the demand in the previous month. Since the demand in September was 160, the forecast for October is also 160.

The Owner of Darkest Tans Unlimited in a Local Mall