Answered: Period 1 2 3 4 6. 7 8 9 10 11 12 Sales…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...

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A convenience store recently started to carry a new brand of soft drink. Management is interested in estimating future sales volume to determine whether it should continue to carry the new brand or replace it with another brand. The following table provides the number of cans sold per week. Use both the trend projection with regression and the exponential smoothing (let alpha (α)=0.40

with an initial forecast for week 1 of 568) methods to forecast demand for week 13. Compare these methods by using the mean absolute deviation and mean absolute percent error performance criteria. Does your analysis suggest that sales are trending and if so, by how much?

(i) Obtain the trend projection with regression forecast. The forecast for week 13 is __. (Enter your response rounded to the nearest whole number.)

Specify the mean absolute deviation (MAD) and mean absolute percent error (MAPE). (Enter your responses rounded to two decimal places.)

MAD: ____

MAPE: ____%

(ii) Obtain the exponential smoothing forecast. The forecast for week 13 is ___. (Enter your response rounded to the nearest whole number.)

Specify the mean absolute deviation (MAD) and mean absolute percent error (MAPE). (Enter your responses rounded to two decimal places.)

MAD: ____

MAPE: ____%

Based on MAD, the best method is Trend projection with regression / exponential smoothing alpha (α)=0.40

Based on MAPE, the best method is Trend projection with regression / exponential smoothing alpha (α)=0.40

Period
1
2
3
4
6.
7
8
9
10
11
12
Sales
568
604
645
742
661
606
749
680
704
736
660
756

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