Based on the data below for chocolate demand per week and using the naïve forecasting method, how much you should order for 5th week?

Question

Week1, Time Series Value=13
Week2, Time Series Value=8
Week3, Time Series Value=24
Week4, Time Series Value=10

Answer 1

The naïve forecasting method uses the most recent observation as the forecast for the next period. In this case, to forecast the demand for chocolate in the 5th week, we will use the demand observed in the 4th week.

Given:

• Week 4, Time Series Value = 10

Using the naïve method, the forecasted demand for week 5 will be the same as the demand in week 4, which is:

Forecast for Week 5 = 10

So, you should order 10 units of chocolate for the 5th week.