Question

Answer all parts please :)

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 α = 0.4 with an initial forecast for week 1 of 617 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? Period Sales 10 12 617 617 648 739 659 623 742 704 724 715 668740 (i) Obtain the trend projection with regression forecast. The forecast for week 13 is 739. (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 28.56 4.18 (ii) Obtain the exponential smoothing forecast The forecast for week 13 is 712. (Enter your response rounded to the nearest whole number.) Specify the mean absolute deviation (MAD) and mean absolute percent error (MAPE). (Enter your responses as real numbers rounded to two decimal places.) MAD MAPE 36.44 5.16% Based on MAD, the best method is trend projection with regression Based on MAPE, the best method is trend projection with regression

Answer 1

Trend projection with regression forecast:

>> Exponential

Both MAD and MAPE are lower for trend projection with regression. It is the best method in both the cases