T. Musora, Z. Chazuka, A. Jaison, J. Mapurisa, and J. Kamusha, Chinhoyi University of Technology, Zimbabwe
The primary goal of any organization involved in trading business is to maximize profits while keeping costs to a bare minimum. Sales forecasting is an inexpensive way to achieve the aforementioned goal. Sales forecasting frequently leads to improved customer service, lower product returns, lower deadstock, and efficient production planning. Because of short shelf life of food products and importance of product quality, which is of concern to human health, successful sales forecasting systems are critical for the food industry. The ARIMA model is used to forecast sales of a perishable orange drink in this paper. The methodology is applied successfully. ARIMA (0,1,1)(0,1,1)12 was concluded as the appropriate model. Model diagnostics were done; results showed that no model assumption was violated. Fitted values were regressed against observed values. A very strong linear relationship was evident with an R 2 value of over 90% which is very plausible.
Sales forecasting, Orange Drink, ARIMA, Model Diagnostics, R2 - value