January $2024$

BUS $320$ Homework for FORECASTING Problem Solving Assignment SS$2023$

The Katonah Family Markets, operators of $5$ supermarkets in Westchester County, approached Iona

University$$s LaPenta School of Business to offer an Internship to an undergraduate business senior with

the possibility of it becoming a full$-$time position. The purpose of the internship is to help the Chain

forecast its demand for ALL $($HE$)$ Laundry Detergent. ALL $($HE$)$ is required for new high technology

washing machines that cannot tolerate significant foaming so it is not a mainstream product and the

Chain is having difficulty in carrying it on the shelves so it has lost some of its customers to other

supermarket chains.

ALL $($HE$)$ comes in two sizes namely $20$ washes and $49$ washes $($used to be $26$ and $56$ before Pandemic

Shrinkflation!$).$ Below you will find the sales data for this product by size:

Period Actual Sales $20$

Wash size

Forecast for $20$

Wash size

Actual Sales $49$

Wash size

Forecast for $49$

Wash size

January $202391$

February $202390$

March $202382$

April $2023113$

May $2023144$

June $202382$

July $2023122$

August $2023114$

September $2023144$

October $202383$

November $2023101$

December $202313113$

January $20241132$

February $2024????$

$1)$ Using the Moving Average Method, forecast the February $2024$ demand for $20$ Wash size ALL

$($HE$)$ product using n $=3,4$ and $5$ periods

$2)$ Using the Weighted Moving Average Method, forecast the demand for the $20$ Wash size product

ALL $($HE$)$ size using n$=3$ and $4$ periods with the weights being $4($January $2024),3($December

$2023),2($November $2023)$ and $1($October $2023)$

$3)$ Using the Exponential Smoothing Method with alpha $=0\mathrm{.}4,$ forecast the February $2024$ demand

for each ALL $($HE$)$ product

$4)$ One of the owners of the Katonah Family Markets thinks that he has developed a simple

regression formula to forecast the demand for the $20$ washes size of ALL $($HE$)$ which assumes

that every sale of a $49$ Washes size eliminates a next month$$s sale of two $20$ Washes size:

Y $=10\mathrm{.}5-2$X where Y is the forecast for the next month$$s demand for $20$ Washes size and X is $2$

times the prior month$$s sales of the $49$ Washes size. Test this simple regression using data for

$1$

August $2023$ through January $2024.$ The Coefficient of Correlation for this simple regression is $-$

$0\mathrm{.}4$ so what does this tell you about this simple regression? What is the Coefficient of

Determination for this simple regression and what does that tell you?

$2$