Forecasting Methods for TIVO$-10$K Dehydrator Demand

Objective:

We seek an in$-$depth evaluation of our current demand forecasting methods for the TIVO$-10$K

dehydrator. With six financial cycles of data on actual vs$.$ predicted demand, we aim to assess

the efficacy of our existing software$-$based forecasting technique. The board is questioning the

financial prudence of the current forecasting software subscription and is open to considering

more cost$-$effective alternatives.

Background:

A senior planning manager at ACME Corporation has been employing a specific software tool

for demand forecasting over the past six cycles. Despite the considerable expense on this

software, there is a need to evaluate its performance and explore simpler, potentially more

cost$-$effective forecasting methods.

Historical Demand Data:

Period Demand Forecast

$19087$

$28588$

$39187$

$49289$

$59590$

$68892$

Task:

$1)$ Analyze the provided historical demand data against the forecasted figures to determine

the accuracy of the current forecasting method.

$2)$ Compare the existing software's performance with simpler forecasting methods, such as

moving averages, exponential smoothing, or even basic linear regression.

$3)$ Evaluate the potential of these simpler methods in terms of accuracy, ease of use, and

cost$-$effectiveness.

Criteria for Evaluation:

$$ Accuracy of the forecast $($measured by the least mean square error, MAPE, or any other

statistical measure you deem appropriate$).$

$$ Complexity of the method $($consider the ease of understanding and using the method for

a non$-$specialist$).$

$$ Cost implications $($consider the subscription cost of current software versus the cost of

alternative methods$).$

Expected Deliverables:

We expect a report containing:

$$ An assessment of the current forecasting method's performance.

$$ A comparison with at least two simpler forecasting techniques.

$$ A recommendation on whether to continue with the existing software or to adopt a

different method, backed by quantitative analysis.

Format and Submission:

We appreciate graphs, tables, or any visual aids that can enhance understanding. The report

should conclude with a clear recommendation for the board of directors. Please explain calculations as I should show it in excel file