You are the sales forecaster for a computer store that has nine locations. The stores depend on your projections of future sales in order to make decisions on staffing, advertising, purchasing, and the like. All stores are similar in size and merchandise selection. However, sales vary by location due to geographic considerations, differing customer-bases, and random fluctuations. Sales for 2006 were as follows:
Store 2006 2008
One $12,000,000
Two 11,500,000
Three 11,000,000
Four 10,500,000
Five 10,000,000
Six 9,500,000
Seven 9,000,000
Eight 8,500,000
Nine 8,000,000
Your economic forecasting service has estimated that total sales between 2006 and 2008 should increase by 10% (equivalent to $99,000,000). Your task is to predict 2008 sales for each store. Since your manager believes strongly in the economic forecasting service, it is imperative that your total sales equal $99,000,00

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ANTHOUGOGO ANTHOUGOGO · Answer 1

Answer:

A Computer Store

Prediction of 2008 Sales

Store 2006 Predicted 2008 Sales

One $12,000,000 $13,200,000

Two 11,500,000 12,650,000

Three 11,000,000 12,100,000

Four 10,500,000 11,550,000

Five 10,000,000 11,000,000

Six 9,500,000 10,450,000

Seven 9,000,000 9,900,000

Eight 8,500,000 9,350,000

Nine 8,000,000 8,800,000

Total $90,000,000 $99,000,000

Explanation:

a) Data and Calculations:

Estimated increase in total sales between 2006 and 2008 = 10%

Total Sales in 2006 = $90,000,000

Total Sales in 2008 = $99,000,000 ($90,000,000 * 1.1)

Store 2006 Predicted 2008 Sales

One $12,000,000 $13,200,000 ($12,000,000 * 1.1)

Two 11,500,000 12,650,000 ($11,500,000 * 1.1)

Three 11,000,000 12,100,000 ($11,000,000 * 1.1)

Four 10,500,000 11,550,000 ($10,500,000 * 1.1)

Five 10,000,000 11,000,000 ($10,000,000 * 1.1)

Six 9,500,000 10,450,000 ($9,500,000 * 1.1)

Seven 9,000,000 9,900,000 ($9,000,000 * 1.1)

Eight 8,500,000 9,350,000 ($8,500,000 * 1.1)

Nine 8,000,000 8,800,000 ($8,000,000 * 1.1)

Total $90,000,000 $99,000,000 ($90,000,000 * 1.1)