Scenario: You are still a consultant for the Excellent Consulting Group. You have completed the first assignment, developing and testing a forecasting method based on linear regression (Case 3). However, your consulting manager at ECG wants to go the next step and investigate another forecasting method. It is important to do a thorough job for the client, and you have the expertise to analyze different forecasting methods. You have decided to look at the sales data for client’s lottery app as a single data set and use a time series analysis, namely SES, single exponential smoothing.
Using Excel, use the forecasted sales from Case 3 to compute the MAPE, by doing the following:
- Find the MAPE for the first 12 months (assume the forecast for Month 1 – or January – is equal to January’s actual sales). To find the MAPE, you will need to compare actual sales for each month, or Y(t), to forecasted sales, or F(t).
- Next, forecast the sales for the next three months (Feb - Apr), and compute the MAPE for this 3-month period. Compare this 3-month MAPE to the MAPE you calculated for the SES analysis (Case 4).
Then write a report to your boss that briefly describes the results that you obtained. Make a final recommendation on which method to use, SES or Linear Regression.
Data: Use the data that you previously have and generated from your analyses in Case 3.
- Accurate and complete SES analysis in Excel.
- Length requirements = 4–5 pages minimum (not including Cover and Reference pages)
- Provide a brief introduction/ background of the problem.
- Complete and accurate Excel analysis.
- Written analysis that supports Excel analysis, and provides thorough discussion of assumptions, rationale, and logic used.
- Complete, meaningful, and accurate recommendation(s).