Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

You run Colgate and sell toothpaste. You are trying to forecast demand for 2022, and you have sales data for the past 7 years, in

You run Colgate and sell toothpaste. You are trying to forecast demand for 2022, and you have sales data for the past 7 years, in $M:

2015: 55

2016: 45

2017: 100

2018: 50

2019: 100

2020: 150

2021: 200

First, generate 5 forecasts using the following methods: naive, simple mean method, 3 period moving average, 2 period weighed moving average (with weights of 0.8 and 0.2 for the most recent and second most recent period, respectively. The last two forecastingmethods are the exponential smoothing method, one with alpha = 0.5 and the other with alpha = 0.8. Anthony is in marketing, and he's very worried about being understocked, sohe picks his favorite forecasting method based on this worry. Bria is in investor relations, on the other-hand is really worried about big forecasting errors in either direction, and she picks her favorite forecasting method using her preferred metric. Both Anthony and Bria only use the last 4 periods worth of actuals and forecasts to generate errors to calculate their preferred forecasting accuracy metric. What is the absolute difference in Anthony's favorite forecasting method and Bria's favorite forecasting method?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Management Principles and Applications

Authors: Sheridan Titman, Arthur J. Keown, John H. Martin

13th edition

134417216, 978-0134417509, 013441750X, 978-0134417219

More Books

Students also viewed these Finance questions