Suppose a firm has had the historical sales figures shown as follows. What would be the forecast for next year's sales using the naïve approach?
$$\begin{array} { c c c c c c c }
\text { Year } & 2013 & 2014 & 2015 & 2016 & 2017 \
\text { Sales } & \$ 1,500,000 & \$ 1,750,000 & \$ 1,400,000 & \$ 2,000,000 & 2,200,000
\end{array}$$
A) $2,100,000
B) $2,200,000
C) $1,780,000
D) $1,730,000

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 naïve approach?
$$\begin{array} { c c c c c c c } 
\text { Year } & 2013 & 2014 & 2015 & 2016 & 2017 \
\text { Sales } & \$ 1,500,000 & \$ 1,750,000 & \$ 1,400,000 & \$ 2,000,000 & 2,200,000
\end{array}$$
A) $2,100,000
B) $2,200,000
C) $1,780,000
D) $1,730,000

Quizplus · Accepted Answer

The naïve approach to forecasting involves simply taking the last period's actuals as the forecast for the next period. Therefore, the forecast for next year's sales would be the same as the sales in 2017, which is $2,200,000.

Suppose a Firm Has Had the Historical Sales Figures Shown