DEMAND FORECASTING IN BEVERAGE INDUSTRY: A CASE STUDY OF BUSINESS SIMULATION GAME

Abstract

This study is the Demand Forecasting in Beverage Industry, a case study of Business Simulation Game.The objective is to examine the appropriate forecasting model which forecasts the demand for 3 types of ready-to-drink juice. These include orange juice, melon juice, and apple juice in a business simulation game scenario via Monsoonsim Business Simulation Game. Students are like entrepreneurs and practitioners. While playing, there was a problem with the lack of guidelines for determining the number of orders for each product. Players usually based on the previous month's sales volume. As a result, some purchase orders exceeded the demand and some items encountered problems with shortage of products. This shows inaccuracies in forecasting and relatively high discrepancies. Therefore, the time series forecasting techniques such as Moving Average Method, Exponential Smoothing Method and time-series forecasting are based on trend. Forecasting has been applied to the historical sales data of 24 days and to compare forecast errors by Mean Absolute Percent Error (MAPE) to gain the best optimal demand forecasting method. The study found that the Moving Average forecasting method is suitable for forecasting apple juice. The Time-Series Forecasting based on Trend by Linear Regression Analysis is suitable for melon water forecasting. While the Exponential Smoothing forecasting method is suitable for orange juice forecasting with Mean Absolute Percent Error at 28.32%, 28.44%, 24.81%, respectively.