Suppose a firm has had the historical sales figures shown as follows. What would be the forecast for next year's sales using the average approach if it was determined that 2013 is a "stale" year?
$$\begin{array} { c c c c c c c }
\text { Year } & 2013 & 2014 & 2015 & 2016 & 2017 \
\text { Sales } & \$ 1,000,000 & \$ 2,000,000 & \$ 1,700,000 & \$ 1,800,000 & \$ 2,200,000
\end{array}$$
A) $1,000,000
B) $1,740,000
C) $1,925,000
D) $2,200,000

Question

Suppose a firm has had the historical sales figures shown as follows. What would be the forecast for next year's sales using the average approach if it was determined that 2013 is a "stale" year?
$$\begin{array} { c c c c c c c } 
\text { Year } & 2013 & 2014 & 2015 & 2016 & 2017 \
\text { Sales } & \$ 1,000,000 & \$ 2,000,000 & \$ 1,700,000 & \$ 1,800,000 & \$  2,200,000
\end{array}$$
A) $1,000,000
B) $1,740,000
C) $1,925,000
D) $2,200,000

Quizplus · Accepted Answer

The average approach involves calculating the mean of the sales figures, excluding the "stale" year 2013. The average of 2014, 2015, 2016, and 2017 sales is $(2,000,000 + 1,700,000 + 1,800,000 + 2,200,000) / 4 = 1,925,000$.

Suppose a Firm Has Had the Historical Sales Figures Shown