solution

You are hired by a Swiss distributor of consumer goods, Dicgu, to improve their forecasting capabilities. You are tasked with coming up with quarterly forecasts for item OQB59 that appears to have level, seasonality, and trend. While the company does have an existing Holt-Winter forecasting model, no one knows what the parameters (Alpha, Beta, or Gamma) are.

You do have some information. For example, you know that historically, the demand in each quarter follows this distribution:

– Q1 (January through March) = 60% of average quarterly demand

– Q2 (April through June) = 80% of average quarterly demand

– Q3 (July through September) = 140% of average quarterly demand

– Q4 (October through December) = 120% of average quarterly demand.

You just ran the forecast at the end of September (end of 2014Q3) and you have the following estimates:

For level: a^2014Q3=1049 units

For trend: b^2014Q3=40.9 units per quarter

Q1. What is your forecast for demand for 2014Q4? In other words, what is X^2014Q3,2014Q4?

Enter your answer rounded to two decimal places. (For example, if your answer is 12.3456, you should enter 12.35 in the box below.)

Q2. Suppose the actual demand for item OQB59 in 2014Q4 is 1050 units. What is the lowest possible value for your estimate for level,a^2014Q4?

Enter your answer rounded to two decimal places. (For example, if your answer is 12.3456, you should enter 12.35 in the box below.)

Q3.The model was run at the end of 2014Q4. It provided you with the most recent estimates of each pattern. The estimate for level, a^2014Q4 was 1067.8. What is the value of alpha?

Enter your answer rounded to two decimal places. (For example, if your answer is 12.3456, you should enter 12.35 in the box below.)

Q4.The model was run at the end of 2014Q4. The estimate for trend. b^2014Q4 was found to be 39.6. What is value of beta?

Q5. e model was run at the end of 2014Q4. The estimate for seasonality, F^2014Q4 was found to be 1.189, before any normalization was done. What is the value of gamma?

Enter your answer rounded to two decimal places. (For example, if your answer is 12.3456, you should enter 12.35 in the box below.)

Notes:

1- Kindly write question and answer in order.

2- Kindly read questions and answer as per given data. Please note that For level: a^2014Q3=1049 units not 1054 units For trend: b^2014Q3=40.9 units per quarter not 41.4 units per quarter

Thanks and regards