The owner of Darkest Tans Unlimited in a local mall is forecasting this month's (October's) demand for the one new tanning booth based on the following historical data: $$\begin{array} { l l }
\text { Month } & \text { Number of Visits } \
\hline \text { April } & 100 \
\text { May } & 140 \
\text { June } & 110 \
\text { July } & 150 \
\text { August } & 120 \
\text { September } & 160
\end{array}$$ What is this month's forecast using the naive approach?
A) 100
B) 160
C) 130
D) 140
E) 120

Question

The owner of Darkest Tans Unlimited in a local mall is forecasting this month's (October's) demand for the one new tanning booth based on the following historical data: $$\begin{array} { l l } 
\text { Month } & \text { Number of Visits } \
\hline  \text { April } & 100 \
\text { May } & 140 \
\text { June } & 110 \
\text { July } & 150 \
\text { August } & 120 \
\text { September } & 160
\end{array}$$ What is this month's forecast using the naive approach?
A) 100
B) 160
C) 130
D) 140
E) 120

Quizplus · Accepted Answer

The naive approach uses the demand from the most recent period as the forecast for the next period. Therefore, the forecast for October is the same as the number of visits in September, which is 160.

The Owner of Darkest Tans Unlimited in a Local Mall