Northern Napa Valley Winery

Date of Submission: 3/16/2012

Title of Assignment: Northern Napa Valley Winery, Inc.

CERTIFICATION OF AUTHORSHIP: I certify that I am the author of this paper and that any assistance I received in its preparation is fully acknowledged and disclosed in the paper. I have also cited any sources from which I used data, ideas or words, either quoted directly or paraphrased. I also certify that this paper was prepared by me specifically for this course.

Student's Signature: _______________________

*****************************************************************

Instructor's Grade on Assignment:

Instructor's Comments:

Executive Summary

Northern Napa Valley Winery in Napa Valley, California is producing red table wine as a way to increase profits. The wine became very popular and became a big-seller so Northern decided to grow grapes specifically for the wine. Another company has now offered to purchase all of Northern’s excess grapes for the coming year. The CEO of Northern must now forecast annual sales, to determine how much grapes will be needed to produce its wine and how much will be leftover to sell. By using several forecasting models with StatTools, Northern will realize the best forecasting method is the Exponential Smoothing Winter’s model. This model has the lowest percentage error when compared to the other models. It is recommended Northern use this model in the future because it takes into account the seasonality of the industry.

Background

As one of the oldest wineries in Napa Valley, Northern Napa Valley Winery (Northern) has established itself as an effective producer of a number of different specialty wines at moderate prices. However, in the late 1960’s in an effort to increase revenues Northern started to produce a red table wine targeted to a lower priced sector.

The original plan called for the production of the table wine with the grapes that were left over from the production of Northern’s specialty wine. The wine...