Question

Your team at Starbx Coffee would like you to create a forecast for sales. Given the nature of daily coffee consumption, with customers drinking more coffee in the morning, and around the same total amount each day, what type of seasonality would you most likely use for your forecast?

a) Additive seasonality
b) Exponential seasonality
c) Multiplicative seasonality
d) Does not apply

Answer 1

The type of seasonality that would most likely be used for the sales forecast in this scenario is exponential seasonality.

Step-by-step explanation:

The type of seasonality that would most likely be used for the sales forecast in this scenario is b) Exponential seasonality.

In exponential seasonality, the variation in sales is proportional to the level of sales. Since customers are drinking around the same total amount of coffee each day but more in the morning, the sales would increase exponentially in the morning and decrease gradually throughout the day. This pattern aligns with exponential seasonality.

For example, if a coffee shop consistently sells 100 cups of coffee on average during weekdays, but sells 150 cups of coffee in the morning and 50 cups in the afternoon, exponential seasonality can capture this pattern by multiplying the average daily sales by a factor, such as 1.5 in the morning and 0.5 in the afternoon.