Scenario: You are a consultant for the Diligent Consulting Group (DCG). You have completed the first assignment, developing and testing a forecasting method that uses Linear Regression (LR) techniques (Module 2 Case). However, the consulting manager at DCG wants to try a different forecasting method as well. Now you decide to try Single Exponential Smoothing (SES) to forecast sales.
Using this Excel template: Data chart for BUS520 SLP 2, do the following:
Calculate the MAPE for Year 2 Linear Regression forecast (use the first spreadsheet tab labeled “Year 2 Forecast – MAPE”).
Calculate forecasted sales for Year 2 using SES (use the second spreadsheet tab labeled “SES – MAPE”). Use 0.15 and 0.90 alphas.
Compare the MAPE calculated for the LR forecast (#1 above) with the MAPEs calculated using SES.
Then write a report to your boss in which you discuss the results obtained above. Using calculated MAPE values, make a recommendation concerning which method appears to be more accurate for the Year 2 data: SES or Linear Regression.
SLP Assignment Expectations
Analysis
Conduct accurate and complete SES analysis in Excel. You may also check the following link for your reference: https://support.office.com/en-US/article/data-analysis-7e71735c-c471-47e1-84ef-a8c23dc3098b
Written Report
Length requirements: 2 – 3 pages minimum (not including Cover and Reference pages). NOTE: You must submit 2 – 3 pages of written discussion and analysis. This means that you should avoid use of tables and charts as “space fillers.”
Provide a brief introduction to/background of the problem.
Complete a written analysis that supports your Excel analysis, discussing the assumptions, rationale, and logic used to complete your SES forecast.
Give complete, meaningful, and accurate recommendation(s) relating to whether LR or SES is more accurate in predicting sales.
Write clearly, simply, and logically. Use double-spaced, black Verdana or Times Roman font in 12 pt. type size.
Have an introduction at the beginning to introduce the topics and use keywords as headings to organize the report.
Avoid redundancy and general statements such as “All organizations exist to make a profit.” Make every sentence count.
Paraphrase the facts using your own words and ideas, employing quotes sparingly. Quotes, if absolutely necessary, should rarely exceed five words.
Upload both your written report and Excel file to the SLP 2 Dropbox .
New Star Grocery Company
Sales
b1 Year 2 Customers (x) Actual Y(t) Forecast F(t) Y(t) – F(t) PE APE
b0 January 215
February 259
Y= b0+ b1x March 325
April 354
May 258
June 199
July 254
August 299
September 264
October 198
November 223
December 261 ME = Mean error
MPE = Mean percentage error
ME MPE MAPE MAPE = Mean absolute percentage error