Question
You are hired by a Croatian distributor of consumer goods, Dicgu, to improve their forecasting capabilities. You are tasked with coming up with quarterly forecasts
You are hired by a Croatian distributor of consumer goods, Dicgu, to improve their forecasting capabilities. You are tasked with coming up with quarterly forecasts for item MBR36 that appears to have level, seasonality, and trend. While the company does have an existing Holt-Winter forecasting model, no one knows what the parameters (Alpha, Beta, or Gamma) are.
You do have some information. For example, you know that historically, the demand in each quarter follows this distribution:- Q1 (January through March) = 60% of average quarterly demand- Q2 (April through June) = 80% of average quarterly demand- Q3 (July through September) = 140% of average quarterly demand- Q4 (October through December) = 120% of average quarterly demand.You just ran the forecast at the end of September (end of 2014Q3) and you have the following estimates:For level:a
^
2014Q3
= 1060 units
For trend:b
^
2014Q3
= 41.3 units per quarter
The model was run at the end of 2014Q4. It provided you with the most recent estimates of each pattern. The estimate for level,a
^
2014Q4
was 1067.8. What is the value of alpha?
The model was run at the end of 2014Q4. The estimate for trend,b
^
2014Q4
was found to be 39.6. What is value of beta?
The model was run at the end of 2014Q4. The estimate for seasonality,F
^
2014Q4
was found to be 1.189, before any normalization was done. What is the value of gamma?
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