Forcasting Checkpoint

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Lisa Brown
Hsm/ 260
Week 5 – Forecasting Checkpoint
3/8/13

Exercise 9.1

20X1 $5,250,000
20X2 $5,500,000
20X3 $6,000,000
20X4 $6,750,000
     
Moving Averages
20X2-X4 $18,250,000 / 3 = $6,083,333

Weighted Moving Averages
Fiscal Year Expenses Weight Weighted Score
20X2 $5,500,000 1 $5,500,000
20X3 $6,000,000 2 $12,000,000
20X4 $6,750,000 3 $20,250,000
          __       ___________
6 $37,750,000
20X5 $37,750,000 /6 = $6,291,667

Exponential Smoothing
NF = $6,300,000 + 0.95($6,750,000 - $6,300,000)
      = $6,300,000 + 0.95(45,000)
      = $6,300,000 + (42,750)
      = $6,342,750

Exercise 9.3

The following data represent total revenues (from all sources) for the Palmdale Human Service Agency for the past four fiscal years:

20X1 $15,000,000
20X2 $14,250,000
20X3 $14,000,000
20X4 $13,500,000

Moving Averages
20X2-X4 $41,750,000 / 3 = $13,916,667

Weighted Moving Averages
Fiscal Year Expenses Weight Weighted Score
20X2 $14,250,000 1 $14,250,000
20X3 $14,000,000 2 $28,000,000
20X4 $13,500,000 3 $40,500,000
          __       ___________
6                       $82,750,000
20X5       $82,750,000/6 = $13,791,667

Exponential Smoothing
NF = $13,000,000 + 0.95($13,500,000 - $13,000,000)
      = $13,000,000 + 0.95(500,000)
      = $13,000,000 + (475,000)
      = $13,475,000

Financial trends affect forecasting by preparing and planning for the future, budgeting the money right, deciding what program is working or not working.
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