Ks brewerys management wants to develop a model to forecast

Question

K's Brewery is selling its famous beers (K Lager, K-IPA, and K's Black Belt Ale) in four sales regions throughout Germany. These four regions are Northeast, Northwest, Southeast and Southwest. Due to cultural, as well as historic and political differences, demand in the four regions differs. The firm uses two general marketing tools: advertisements and promotions (determined by the marketing budget) and signing up restaurants as contract distributors that exclusively sell K beers. Regional managers are allowed to employ varying emphasis on these two strategies, depending on what they think works best in a given region. The table includes sales data for the past 12 months, as well as marketing budgets and number of contracted restaurants for each region (also per month). Also included is the proposed marketing budget for each region for the next month, and the number of restaurants that are expected to be under contract in the next month.

K's brewery's management wants to develop a model to forecast future demand. Which of the three possible predicting variables (marketing budget, number of contracted restaurants, or time) alone or in any possible combination represents the best forecasting model? Choose your preferred model, explain your choice, and forecast demand for the next month (Note: although beer sales may be subject to seasonality, you do not need to consider this to solve this problem). Further hints: The forecasts are done by each of the four regional managers, i.e. demand for each region is forecasted separately. The best forecasting model may not be based on the same predicting variable for each region.

Period (month)	Demand Northeast	Marketing/sales budget Northeast	Number of contracted restaurants Northeast	Demand Northwest	Marketing/sales budget Northwest	Number of contracted reastaurants Northeast
1	1200	25,000.00 €	80	800	18,000.00 €	50
2	1300	28,000.00 €	85	850	18,000.00 €	58
3	1200	30,000.00 €	93	820	18,000.00 €	63
4	1400	30,000.00 €	95	900	22,000.00 €	66
5	1500	30,000.00 €	95	880	22,000.00 €	67
6	1450	35,000.00 €	95	920	22,000.00 €	68
7	1550	35,000.00 €	95	900	25,000.00 €	73
8	1700	38,000.00 €	95	950	25,000.00 €	73
9	1800	35,000.00 €	95	1020	26,000.00 €	75
10	1630	35,000.00 €	95	930	27,500.00 €	79
11	1480	35,000.00 €	95	990	28,000.00 €	77
12	1480	35,000.00 €	95	1000	28,500.00 €	77
13		35,000.00 €	95		25,000.00 €	75

Demand Southeast	Marketing/Sales Budget Southeast	Number of contracted restaurants Southeast	Demand Southwest	Marketing/Sales Budget Southwest	Number of contracted restaurants Southwest
990	20,000.00 €	88	1550	25,000.00 €	135
950	15,000.00 €	85	1600	25,000.00 €	135
940	15,000.00 €	80	1450	25,000.00 €	140
820	12,000.00 €	77	1500	28,000.00 €	143
900	12,000.00 €	78	1600	28,000.00 €	142
950	12,000.00 €	83	1450	28,000.00 €	144
1030	18,000.00 €	87	1640	28,000.00 €	151
1020	18,500.00 €	91	1670	28,000.00 €	158
1050	19,000.00 €	92	1750	25,000.00 €	160
1000	19,000.00 €	92	1780	25,000.00 €	157
1050	19,000.00 €	92	1800	25,000.00 €	161
1100	19,000.00 €	93	1850	25,000.00 €	161
	20,000.00 €	93		25,000.00 €	160