SOLUTION: The sales of a factory manufacturing bicycles, over the last 24 months were as follows: Month Units sold Month Units sold 1 1 140 13 1 440 2 1 180

Question 1133309: The sales of a factory manufacturing bicycles, over the last 24 months were as follows:

Month Units sold Month Units sold
1 1 140 13 1 440
2 1 180 14 1 530
3 1 130 15 1 560
4 1 080 16 1 350
5 1 110 17 1 350
6 1 200 18 1 420
7 1 280 19 1 530
8 1 340 20 1 530
9 1 340 21 1 430
10 1 240 22 1 430
11 1 140 23 1 490
12 1 230 24 1 570

It is obvious that the monthly sales are increasing, but it is also obvious to the production manager that he is getting close to his capacity. In fact, should demand exceed 1600 units a months, the factory would have to be expanded to meet the requirements. Investigate the possibility, by conventional forecasting methods ( in other words, the moving averages) that the figure of 1600 units will be exceeded in any of the next six months.

Answer by Theo(13342) (Show Source): You can put this solution on YOUR website!
the bottom line on forecasting is that there is no magic bullet.
here's a lot of information on forecasting in the reference tht you might find interesting.
there are many methods as you will see by just going through the index.
https://otexts.com/fpp2/

i found a tool online that uses exponential smoothing.
the results from using the tool indicated that there is a pretty good possibility that the future of 1600 will be exceeded in the next 6 months.

that tool can be found at https://www.wessa.net/rwasp_exponentialsmoothing.wasp

i also did a regression analyis using a regression analysis tool online that can be found at http://www.xuru.org/rt/LR.asp#CopyPaste

both tools indicate that the probability of exceeding 1600 is there.
even on a straight line projection, the data indicates exceeding 1600 by month 30.
just use the formula by replacing x with 30.

exponential smoothing mimics the pattern of the data.
here again, the projection itself may or may not exceed the 1600 amount, but the high estimates do exceed it.

consequently, i believe the manager should prepare for upgrading capacity in preparation for the possibility that the forecast will exceed 1600.

it's always hard to predict exactly when that would occur, but i don't believe there's any strong evidence that it won't.

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