Question

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 alphaαequals=0.4 with an initial forecast for week 1 of 581​) 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	1	2	3	4	5	6	7	8	9	10	11	12
Sales	581	624	649	739	639	638	745	703	766	695	672	754

​(i) Obtain the trend projection with regression forecast.

The forecast for week13 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
	​%

Answer 1

Calculations:

Solution:

So,

Trendline regression:

Forecast for period-13 = 754
MAD = 35.04
MAPE = 5.08%

Exponential Smoothing:

Forecast for period-13 = 719
MAD = 47.48
MAPE = 6.70%