The business analyst for Video Sales, Inc. wants to forecast this year's demand for DVD decoders based on the following historical data: $$\begin{array} { l l }
\text { Year } & \text { Demand } \
\hline \text { 5 years ago } & 900 \
\text { 4 years ago } & 700 \
\text { 3 years ago } & 600 \
\text { 2 years ago } & 500 \
\text { Last year } & 300
\end{array}$$ What is the forecast for this year using the naive approach?
A) 163
B) 180
C) 300
D) 420
E) 510

Question

The business analyst for Video Sales, Inc. wants to forecast this year's demand for DVD decoders based on the following historical data: $$\begin{array} { l l } 
\text { Year } & \text { Demand } \
\hline \text { 5 years ago } & 900 \
\text { 4 years ago } & 700 \
\text { 3 years ago } & 600 \
\text { 2 years ago } & 500 \
\text { Last year } & 300
\end{array}$$ What is the forecast for this year using the naive approach?
A) 163
B) 180
C) 300
D) 420
E) 510

Quizplus · Accepted Answer

The naive approach for forecasting takes the actual demand for the current time period and uses it as the forecast for the next period. Therefore, the forecast for this year would be 300, which is the demand for last year.

The Business Analyst for Video Sales, Inc What Is the Forecast for This Year Using the Naive