The sales manager at Grossmieller Importers in New York City needs to determine a monthly forecast for the number of men’s golf sweaters that will be sold so that he can order an appropriate amount of packing boxes. Grossmieller ships sweaters to retail stores throughout the United States and Canada. Shirts are packed six to a box. Data for the past 12 months are contained in the data file called Grossmieller.
a. Plot the sales data using a time-series plot. Based on the graph, what time series components are present? Discuss.
b. (1) Use a single exponential smoothing model with α = 0.30 to forecast sales for month 17. Assume that the initial forecast for period 1 is 36,000. (2) Compute the MAD for this model. (3) Graph the smoothing-model-fitted values on the time-series plot.
c. (1) Referring to part b, try different alpha levels to determine which smoothing constant value you would recommend. (2) Indicate why you have selected this value and then develop the forecast for month 17. (3) Compare this to the forecast you got using a = 0.30 in part b.