Question

Year	Quarter	Sales (in Billions)
2009	1	2.62
2009	2	2.33
2009	3	2.4
2009	4	2.42
2010	1	2.72
2010	2	2.53
2010	3	2.61
2010	4	2.84
2011	1	2.95
2011	2	2.79
2011	3	2.93
2011	4	3.03
2012	1	3.44
2012	2	3.2
2012	3	3.3
2012	4	3.36
2013	1	3.79
2013	2	3.56
2013	3	3.74
2013	4	3.8
2014	1	4.24
2014	2	3.87
2014	3	4.15
2014	4	4.18
2015	1	4.8
2015	2	4.56
2015	3	4.88
2015	4	4.91
2016	1	5.37
2016	2	4.99
2016	3	5.24
2016	4	5.71
2017	1	5.73
2017	2	5.29
2017	3	5.66
2017	4	5.7
2018	1	6.07
2018	2	6.03
2018	3	6.31

In this case study, we will explore Starbuck’s demand. We would like to gain a forecast of the demand by using revenue data gathered from multiple Starbucks’ quarterly reports. The demand will be estimated a variety of ways. You are tasked with estimating this demand using the methods we have reviewed in class.

Conduct a moving-average forecast. Do this for 4 periods, 8 periods, and 12 periods. For each one:

• Find the forecast for the fourth quarter of 2018.

• Find the forecast for all quarters of 2019.
• Find the MAD and MSE.

Answer 1

All the answers are given in image below

Explanation:

Absolute deviation= |Forecast - Sales|

MAD= mean absolute deviation= sum of absolute deviation/no. of months

MSE= Mean square error = sum of squares of deviation/ no. of months

Forecast 4 period moving average= sum of last 4 period sales/4

Example: Forecast of quarter 1, 2010 (4 period moving average) = 2.62+2.33+2.40+2.42)/4= 2.44

Similarly

Forecast 8 period moving average= sum of last 8 period sales/8

Forecast 12 period moving average= sum of last 12 period sales/12