Buds & Suds

Buds & Suds. You are the manager of beer sales for Buds & Suds. Your director believes that your forecasting approach needs to be improved. Looking back over the last 24 weeks of data, you also wonder if you could improve your forecast. Using the actual sales data below, answer the following questions:

  1. Compute an exponentially smoothed forecast of calls for each week. Assume an initial forecast of 54,000 cans of beer in the first week and use α=0.08. What is the forecast for the 25th week?
  2. Re-forecast each period using  α=0.34. What is the forecast for the 25th week?
  3. Using both the MAD and the MSE, which approach (smoothing constant) gives you a more accurate forecast? How did you measure your error? State your MAD and MSE values to 2 decimals.
WeekNumber of Cans of Beer (100s)
150
235
325
440
545
635
720
830
936
1020
1115
1240
1355
1435
1525
1655
1755
1840
1935
2060
2175
2250
2340
2465
25

 

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