Suppose a firm has had the historical sales figures shown below. What would be the forecast for next year's sales using the average approach if it was determined that 2008 is a "stale" year?
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 below. What would be the forecast for next year's sales using the average approach if it was determined that 2008 is a "stale" year? 
A) $1,000,000 
B) $1,740,000 
C) $1,925,000 
D) $2,200,000

Quizplus · Accepted Answer

To use the average approach, we would take the average of the non-stale years, which are 2005, 2006, 2007, and 2009. Adding up the sales figures for those years and dividing by 4, we get an average of $1,925,000. Therefore, this would be the forecast for next year's sales using the average approach.

Suppose a Firm Has Had the Historical Sales Figures Shown