AmeriPlas, Inc., produces 20-ounce plastic drinking cups that are embossed with the names of prominent beers and

Question:

AmeriPlas, Inc., produces 20-ounce plastic drinking cups that are embossed with the names of prominent beers and soft drinks. The sales data are:

Date

Sales

Jan-13

40,358

Feb-13

45,002

Mar-13

63,165

Apr-13

57,479

May-13

52,308

Jun-13

60,062

Jul-13

51,694

Aug-13

54,469

Sep-13

48,284

Oct-13

45,239

Nov-13

40,665

Dec-13

47,968

Jan-14

37,255

Feb-14

38,521

Mar-14

55,110

Apr-14

51,389

May-14

58,068

Jun-14

64,028

Jul-14

52,873

Aug-14

62,584

Sep-14

53,373

Oct-14

52,060

Nov-14

51,727

Dec-14

51,455

Jan-15

47,906

Feb-15

53,570

Mar-15

69,189

Apr-15

64,346

May-15

77,267

Jun-15

75,787

Jul-15

74,052

Aug-15

79,756

Sep-15

73,292

Oct-15

77,207

Nov-15

68,423

Dec-15

67,274

Jan-16

65,711

Feb-16

68,005

Mar-16

78,029

Apr-16

92,764

May-16

97,175

Jun-16

86,255

Jul-16

90,496

Aug-16

87,602

Sep-16

83,577

Oct-16

92,610

Nov-16

73,949

Dec-16

77,711

a. Prepare a time-series plot of the sales data. Does there appear to be a regular pattern of movement in the data that may be seasonal? Ronnie Mills, the product manager for this product line, believes that her brief review of sales data for the four-year period indicates that sales are slowest in November, December, January, and February than in other months. Do you agree?

b. Since production is closely related to orders for current shipment, Ronnie would like to have a monthly sales forecast that incorporates monthly fluctuations. She has asked you to develop a trend model that includes a time index and dummy variables for all but the above mentioned four months. Do these results support Ronnie’s observations? Explain.

c. Ronnie believes that there has been some increase in the rate of sales growth. To test this and to include such a possibility in the forecasting effort, she has asked that you add the square of the time index (T) to your model (call this new term T2). Is there any evidence of increasing of sales growth? Compare the results of this model with those found in part (b).

d. Use the model in part (c) to forecast sales for 2017. Calculate the mean absolute percentage error (MAPE) for the first six months of 2017. Actual sales for those six months were as shown below:

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