The owner of a small brewery in Milwaukee, Wisconsin, is using Winters’s method

Question

The owner of a small brewery in Milwaukee, Wisconsin, is using Winters’s method
to forecast his quarterly beer sales. He has been using smoothing constants of
.2, .2, and .2. He has currently obtained the following values of the
various slope, intercept, and seasonal factors: S10
120, G10
14, c
10
1.2,
c
9
1.1, c
8
.8, and c
7
.9.
a. Determine the forecast for beer sales in quarter 11.
b. Suppose that the actual sales turn out to be 128 in quarter 11. Find S11
and G11
, and
find the updated values of the seasonal factors. Also determine the forecast made at
the end of quarter 11 for quarter 13.

Explanation / Answer

Answer:

Given that:

S10= 120, G10= 14, c10 = 1.2, c9 = 1.1, c8 = .8 , c7 = .9

The forecast model is:

F11 = (S10 + tow x G10) x C11-1 = (120 + 1 x 14 ) x C10 = 134 x c10 = 1.2 x 134 = 160.8

Now we have :

C10 = 0.2 x (D10/S10) + ( 1-0.2) x C10-1 = 0.2 x G10 x C10 / S10 + 0.8 x C9

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