Predicting demand in a bottled water supply chain using classical time series forecasting models

Abstract

In this paper, various classical time series forecasting methods were compared to determine the forecasting method with the highest accuracy in predicting demand of the 50cl product of a bottled water supply chain. The classical time series forecasting methods compared are the moving average, weighted moving average, exponential smoothing, adjusted exponential smoothing, linear trend line, Holt’s model, and Winter’s model. These methods were evaluated to determine the method with the least Mean Absolute Deviation (MAD) value and hence the highest forecasting accuracy. From the results, the weighted moving average forecasting method had the lowest MAD value of 1,987, making it the forecasting method with the highest accuracy for predicting the 50cl bottled water demand. While the exponential smoothing forecasting method had the highest MAD value of 2,483, making it the forecasting method with the least accuracy for predicting the 50cl bottled water demand. This research provides a procedure for aiding supply chain analysts in implementing demand forecasting using classical time series forecasting models.