The Fresh Detergent Case Enterprise Industries produces Fresh, a brand of liquid detergent. In order to more effectively
Posted: Wed Jul 06, 2022 6:35 pm
The Fresh Detergent Case
Enterprise Industries produces Fresh, a brand of liquiddetergent. In order to more effectively manage its inventory, thecompany would like to better predict demand for Fresh. To develop aprediction model, the company has gathered data concerning demandfor Fresh over the last 60 sales periods. Each sales period isdefined as one month. 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 average industry 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 its inventory, thecompany would like to better predict demand for Fresh. To develop aprediction model, the company has gathered data concerning demandfor Fresh over the last 60 sales periods. Each sales period isdefined as one month. 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 average industry 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!