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# Stock of sales merchandise

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Assume that your stock of sales merchandise is maintained based on the forecast demand. If the distributor's sales personnel call on the 1st day of each month, compute your forecast sales by each of the 3 methods requested below.
ACTUAL
June 140
July 180
August 170

a. Using a simple 3-month moving average, what is the forecast for September?
b. Using a weighted moving average, what is the forecast for September with wights of .2,.3, and .5 for June, July & August respectively?
c. Using single exponential smoothing & assuming that the forecast for June had been 130, forecast sales for September with a smoothing constant alpha of .3.

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## Prepare a merchandise purchases budget for the first quarter.

See attached file for proper format.

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Westile Company buys plain ceramic tiles and prints different designs on them for souvenir and gift stores.
It buys the tiles from a small company in Europe, so at all times it keeps on hand a stock equal to the tiles
needed for three months' sales. The tiles cost \$2 each and must be paid for in cash. The company has
56,000 tiles in stock. Sales estimates, based on contracts received, are as follows for the next six
months:

January 24,800
February 35,600
March 26,400
April 28,400
May 19,200
June 14,400

Required:

Estimate purchases (in units) and cash required to make purchases in January, February, and March.

Westile Company
Merchandise Purchases Budget
For the Period Ended March 31
(in units)
January February March
Units to be purchased 34400 6000
Estimated cost
\$ 68800
\$
\$