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?
A)$2,730,000
B)$2,810,000
C)$2,910,000
D)$2,990,000

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? 
A)$2,730,000 
B)$2,810,000 
C)$2,910,000 
D)$2,990,000

Quizplus · Accepted Answer

Using the average approach, we simply take the average of the historical sales figures to forecast next year's sales.

Average = (2,700,000 + 2,800,000 + 3,000,000 + 2,900,000 + 2,800,000) / 5

Average = 2,840,000

Therefore, the forecast for next year's sales using the average approach is $2,910,000 (rounded to the nearest thousand). Thus, the correct answer is C.

Suppose a Firm Has Had the Historical Sales Figures Shown