QuestionQuestion

Marcello’s Bella Gelato is a manufacturer of gourmet ice cream, sorbet, and other frozen desserts. People drive long distances to buy their ice cream and other assorted deserts. A new manager at one of the plants wants to develop a forecasting model so that he can plan the ice cream production operation and determine the number of employees that would be needed. The ice cream sales record for the past 12 quarters is provided in a table below. To assist him with his plans, develop forecasts using the following:

a) (3 points) a naïve model

b) (3 points) a moving average model (n = 4)

c) (3 points) a weighted moving average model (wt-1 = 0.25; wt-2 = 0.35; wt-3 = 0.25; wt-4 = 0.15)

d) (3 points) an exponential smoothing model (alpha= 0.50; F1 = A1)

e) (3 points) a simple linear trend model (not seasonally adjusted); and

f) (3 points) determine the seasonal indices and seasonal factors for each quarter

g) (3 points – bonus) use the solution in part (f) to determine a seasonally adjusted forecast.
For each of the models above, provide the following measures of forecast accuracy: Bias, MAD, MAPE. Which model do you recommend to him for this data set?

Quarter       Ice Cream Sales (000) (gal)
1                   385
2                   560
3                   825
4                   460
5                   410
6                   530
7                   945
8                   550
9                   495
10                  605
11                  905
12                  630

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