The Fresh Detergent Case Enterprise Industries produces Fresh, a brand of liquid detergent. In order to more effectivel
Posted: Sun Jul 03, 2022 4:26 pm
The Fresh Detergent Case
Enterprise Industries produces Fresh, a brand of liquiddetergent. In order to more effectively manage itsinventory, the company would like to better predict demand forFresh. To develop a prediction model, the company hasgathered data concerning demand for Fresh over the last 60 salesperiods. Each sales period is defined as onemonth. The variables are as follows:
Demand = Y = demand for a large sizebottle of Fresh (in 100,000)
Price = the price of Fresh as offered byEnt. Industries
AIP = the averageindustry price
ADV = Ent. Industries AdvertisingExpenditure (in $100,000) to Promote Fresh in the sales period.
DIFF = AIP - Price = the "pricedifference" in the sales period
Use 3-month and 6-month moving averages to predict the demandfor January 2021. Find MAD for both forecasts and identify thepreferred one based on each calculation. Is the moving averagesuitable method for forecasting for this data set? Explain yourreasoning.
Please show work, thank you!
Enterprise Industries produces Fresh, a brand of liquiddetergent. In order to more effectively manage itsinventory, the company would like to better predict demand forFresh. To develop a prediction model, the company hasgathered data concerning demand for Fresh over the last 60 salesperiods. Each sales period is defined as onemonth. The variables are as follows:
Demand = Y = demand for a large sizebottle of Fresh (in 100,000)
Price = the price of Fresh as offered byEnt. Industries
AIP = the averageindustry price
ADV = Ent. Industries AdvertisingExpenditure (in $100,000) to Promote Fresh in the sales period.
DIFF = AIP - Price = the "pricedifference" in the sales period
Use 3-month and 6-month moving averages to predict the demandfor January 2021. Find MAD for both forecasts and identify thepreferred one based on each calculation. Is the moving averagesuitable method for forecasting for this data set? Explain yourreasoning.
Please show work, thank you!