Bella Gelato is a manufacture of gourmet frozen yogurt, ice cream, sorbet, and other frozen desserts and sells its products at its own stores. People drive long distances to buy its products. A new manager at one of the stores wants to develop a forecasting model so that she can plan to order adequate amounts of frozen yogurt from the manufacturing center and to determine the number of employees that would be needed to staff her store. The sales record for the past 12 quarters is provided in a table below.
To assist her with her plans, develop demand forecasts using the models specified below:
a) a naïve model (n=1)
b) a moving average model (n = 4)
c) a weighted moving average model (wt-1 = 0.45; wt-2 = 0.25; wt-3 = 0.20; wt-4 = 0.10)
d) an exponential smoothing model (? = 0.25; F1 = A1)
e) a simple linear trend model (not seasonally adjusted); and
f) determine the seasonal indices and seasonal factors for each quarter
g) use the solution in part (f) to determine a seasonally adjusted forecast.
For each of the models above, provide the following measures of forecast accuracy: Bias, MAD, MAPE. Also, plot both the data and your forecasted values for each model. After, developing all the above forecasts, which model do you recommend to her for this data set – explain your rationale.
| QUARTER | FROZEN YOGURT SALES(000)(GAL) | ||
| 1 | 720 | ||
| 2 | 1120 | ||
| 3 | 1650 | ||
| 4 | 920 | ||
| 5 | 820 | ||
| 6 | 1060 | ||
| 7 | 1890 | ||
| 8 | 1100 | ||
| 9 | 990 |
10 1210
11 1810
12 1260
