Marie Bain Is the Production Manager at a Company That

question 148

Essay

Marie Bain is the production manager at a company that manufactures hot water heaters. Marie needs a demand forecast for the next few years to help decide whether to add new production capacity. The company's sales history (in thousands of units) is shown in the table below. Use exponential smoothing with trend adjustment, to forecast demand for period 6. The initial forecast for period 1 was 11 units; the initial estimate of trend was 0. The smoothing constants are α = .3 and β = .3.
$$\begin{array} { | c | c | } \hline \text { Period } & \text { Actual } \\\hline 1 & 12 \\\hline 2 & 15 \\\hline 3 & 16 \\\hline 4 & 16 \\\hline 5 & 18 \\\hline 6 & 20 \\\hline\end{array}$$

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Definitions:

Faithful Representation

A fundamental qualitative characteristic in accounting that ensures financial information accurately reflects an entity's transactions and events in a way that is complete, neutral, and free from error.

Economic Events

Actions or occurrences that have a direct economic impact on the financial position of a business, influencing its assets, liabilities, and equity.

Financial Reporting

A process of producing financial statements that disclose an organization's financial status to management, investors, and the government.

Taxation Purposes

The objectives or reasons behind imposing taxes, which could include raising revenue for government spending or influencing economic behavior.