Question

A company manufacturing soft drinks is thinking of expanding its plant capacity so as to meet future demand. The monthly sale for the past 6 years are available. State, giving reasons, the type of modelling you will use to obtain good estimates for future demand so as to help the company make the right decisions. Also state four essentials and four non-essentials for the problem.

10 Jan 2026
Answer :
Word Count : 243
The appropriate modelling approach for estimating future demand of soft drinks using six years of monthly sales data is time series modelling. Monthly sales observations are ordered in time and are likely to exhibit components such as trend, seasonality, and random fluctuations. Since soft drink demand commonly shows seasonal patterns due to weather, festivals, and consumption habits, and may also show a long-term upward or downward trend, a time series model such as decomposition models
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