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 is determined that none of the years are "stale"?
A) $1,600,000
B) $1,660,000
C) $1,700,000
D) $1,800,000

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 is determined that none of the years are "stale"? 
A) $1,600,000 
B) $1,660,000 
C) $1,700,000 
D) $1,800,000

Quizplus · Accepted Answer

To use the average approach, we simply add up all the sales figures and divide by the number of years. 
(1,500,000 + 1,800,000 + 1,700,000 + 1,600,000 +1,500,000) / 5 = $1,620,000
Therefore, the forecast for next year's sales would be closest to $1,660,000 (option B).

Suppose a Firm Has Had the Historical Sales Figures Shown