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2006 PROJECTED SALES INFORMATION
The sales department feels very good about the prospects for 2006.
The reputation of the new product, Stupendous Paint, has increased
significantly due to effective adverting in the past few years. The
sales department is ready to launch a major advertising campaign
which is expected to result in the trend of the last three year to
continue for the Stupendous brand even with a small price increase
per gallon.
Super Paint has been produced since the company began
production. The sales level of this product has been rather stagnant
for the last 5 years, and that trend is expected to continue in the
future.
You have made the following conclusions about the two different
products:
Super Paint
• Sales growth in units will continue to be stagnant.
• The more recent years are more representative of continuing unit
sales than years in the further past.
• Exponential Smoothing will be an appropriate unit sales
projection method to use.
Stupendous Paint
• Unit sales growth will continue on its current increasing trend
• An exponential growth function with the year being the
independent variable and the sales volume being the dependent
variable will be an appropriate sales projection method.
2006 DIRECT MATERIAL AND INVENTORY BUDGET
INFORMATION
The production department worked in conjunction with both the
sales and purchasing departments in developing desired projected