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 is determined that 2016 is a "stale" year?
$$\begin{array} { c c c c c c c }
\text { Year } & 2013 & 2014 & 2015 & 2016 & 2017 \
\text { Sales } & \$ 500,000 & \$ 600,000 & \$ 700,000 & \$ 400,000 & \$ 700,000
\end{array}$$
A) $400,000
B) $580,000
C) $625,000
D) $700,000

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 is determined that 2016 is a "stale" year?
$$\begin{array} { c c c c c c c } 
\text { Year } & 2013 & 2014 & 2015 & 2016 & 2017 \
\text { Sales } & \$ 500,000 & \$  600,000 & \$ 700,000 & \$ 400,000 & \$ 700,000
\end{array}$$
A) $400,000
B) $580,000
C) $625,000
D) $700,000

Quizplus · Accepted Answer

To calculate the forecast using the average approach, excluding the "stale" year 2016, we average the sales from 2013, 2014, 2015, and 2017: $(500,000 + 600,000 + 700,000 + 700,000) / 4 = 625,000$.

Suppose a Firm Has Had the Historical Sales Figures Shown