Question

Naïve Sales Forecast Suppose a firm has had the following historic sales figures What would be the forecast for next year's sales using the Naïve approach? 15-1 (LG15-3) Year 2012 2013 2014 2015 2016 Sales $1,500,000 $1,750,000$1,400,000 $2,000,000 $1,600000

Answer 1

As per Naive's approach, the next year sales will be the sales of last year sales. That means next year (2017) sales is $1,600,000 which is the last year's (2016) sales is $1,600,000. For better understanding, the below table is presented.

Therefore, next year's sales using Naive's approach is $1,600,000.