CMA Study Group

The Coffee Pot wants to use time series analysis to predict its erratic weekly sales. The 
company will choose from one of four methods with partial results shown below.

     Week 1 Week 2        Week 3              Week 4 
Actual sales   $2,500  $2,200  $1,800  $2,100
Exponential smoothing forecast     $2,080  $1,912
Regression forecast      $1,900  $1,950
Two-week moving average forecast    $2,350  $2,000
Weighted-average forecast     $2,260  $1,880 

The best forecasting method for The Coffee Pot to use is  

a.    exponential smoothing.
b. regression.
c.    two-week moving average.
d. weighted-average.  
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Ramy Sayed
Accountant
Cairo
Egypt
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Hi Ramy,

I think we need to determine and evaluate the error of each forecasted amount from the actual sales. The forecasting method which has the least amounts of errors is the best method to use. The lesser the error is, the more accurate and closer the forecast is to the actual result.

Below is the error table for the problem. 2-week moving average method gives the least amounta of errors from the actual results. I believe this is the best forecasting method to be used in this particular problem.



Regards,

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Kenneth 
Accountant
Dubai
United Arab Emirates
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Original Message:
Sent: 05-23-2014 03:43 PM
From: Ramy Sayed
Subject: part 1 question need help


The Coffee Pot wants to use time series analysis to predict its erratic weekly sales. The 
company will choose from one of four methods with partial results shown below.

     Week 1 Week 2        Week 3              Week 4 
Actual sales   $2,500  $2,200  $1,800  $2,100
Exponential smoothing forecast     $2,080  $1,912
Regression forecast      $1,900  $1,950
Two-week moving average forecast    $2,350  $2,000
Weighted-average forecast     $2,260  $1,880 

The best forecasting method for The Coffee Pot to use is  

a.    exponential smoothing.
b. regression.
c.    two-week moving average.
d. weighted-average.  
-------------------------------------------
Ramy Sayed
Accountant
Cairo
Egypt
-------------------------------------------

thanks for your help and I agree with your answer but i don't know why the right answer is Regression method? 

-------------------------------------------
Ramy Sayed
Accountant
Cairo
Egypt
-------------------------------------------






Original Message:
Sent: 05-23-2014 03:43 PM
From: Ramy Sayed
Subject: part 1 question need help


The Coffee Pot wants to use time series analysis to predict its erratic weekly sales. The 
company will choose from one of four methods with partial results shown below.

     Week 1 Week 2        Week 3              Week 4 
Actual sales   $2,500  $2,200  $1,800  $2,100
Exponential smoothing forecast     $2,080  $1,912
Regression forecast      $1,900  $1,950
Two-week moving average forecast    $2,350  $2,000
Weighted-average forecast     $2,260  $1,880 

The best forecasting method for The Coffee Pot to use is  

a.    exponential smoothing.
b. regression.
c.    two-week moving average.
d. weighted-average.  
-------------------------------------------
Ramy Sayed
Accountant
Cairo
Egypt
-------------------------------------------

Hi Ramy,

Your thoughts was in the right direction but you should to pay attention why did they give you 4 weeks instead of 2 weeks. So we should to compare last 2 weeks with the proposad numbers of forecast. Hope that can help..

	Week 1	Week 2	Week 3	Week 4
Actual	2,500	2,200	1,800	2,100
Exp smoothing			2,080	1,912
Error			(280)	188
Regres			1,900	1,950
Error			(100)	150
2 week....			2,350	2,000
Error			(550)	100
Weighted ...			2,260	1,880

-------------------------------------------
Assel Zhazybayeva
Accountant
Halliburton Int Inc
Moscow
Russian Federation
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Original Message:
Sent: 05-24-2014 06:31 AM
From: Ramy Sayed
Subject: part 1 question need help

thanks for your help and I agree with your answer but i don't know why the right answer is Regression method? 

-------------------------------------------
Ramy Sayed
Accountant
Cairo
Egypt
-------------------------------------------






Original Message:
Sent: 05-23-2014 03:43 PM
From: Ramy Sayed
Subject: part 1 question need help


The Coffee Pot wants to use time series analysis to predict its erratic weekly sales. The 
company will choose from one of four methods with partial results shown below.

     Week 1 Week 2        Week 3              Week 4 
Actual sales   $2,500  $2,200  $1,800  $2,100
Exponential smoothing forecast     $2,080  $1,912
Regression forecast      $1,900  $1,950
Two-week moving average forecast    $2,350  $2,000
Weighted-average forecast     $2,260  $1,880 

The best forecasting method for The Coffee Pot to use is  

a.    exponential smoothing.
b. regression.
c.    two-week moving average.
d. weighted-average.  
-------------------------------------------
Ramy Sayed
Accountant
Cairo
Egypt
-------------------------------------------