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Case Problem 1: Forecasting Sales: Assignment 2 Submission Date: 9th June 2015
Case Problem 1: Forecasting Sales: Assignment 2 Submission Date: 9th June 2015
Quarter 1
Quarter 2
Quarter 3
Quarter 4
Total Sales
15
10
35
10
18
15
50
14
26
23
12
75
19
28
25
18
90
22
34
28
21
105
24
36
30
20
110
28
40
35
27
130
Managerial Report
Perform an analysis of the sales data for the Vintage Restaurant. Prepare a report for Karen that
summarizes your findings, forecasts, and recommendations. Include the following:
1. A graph of the time series.
2. An analysis of the seasonality of the data. Indicate the seasonal indexes for each quarter, and
comment on the high seasonal indexes make intuitive sense? Discuss.
3. Forecast sales for first Quarter through fourth quarter of the eighth year.
4. Assume that first quarter sales for the eighth year turned out to be $29,500. What was your forecast
error? If this error is large, Karen may be puzzled about the difference between your forecast and
the actual sales value. What can you do to resolve her uncertainty in the forecasting procedure?
5. Recommendations as to when the system that you developed should be updated to account for new
sales data that will occur.
6. Detailed calculations of your analysis in an appendix to your report.
Managerial Report
Develop a report for management of LaPlace Power and Light Company to
Evaluate the effectiveness of the current ordering system. Can it be improved?
Include the following factors in your report:
1. An analysis of optimum order quantity and reorder point.
2. Total Inventory Cost.
Present Total Cost
Optimal Total Cost
Weight-1
Weight-2
Weight-3
Weight-4
26.1
24.4
25.6
25.2
25.2
25.9
25.1
24.8
25.6
24.5
25.7
25.1
25.5
28
25.1
25
25.2
25.2
26.3
25.7
26.6
24.1
25.5
24
27.6
26
24.9
25.3
24.5
23.1
23.9
24.7
24.1
25
23.5
24.9
10
25.8
29
24.3
27.3
11
22.5
23
23.7
24
12
24.5
24.8
23.2
24.2
13
24.4
24.5
25.9
25.5
14
23.1
23.3
24.4
24.7
15
24.6
25.1
24
25.3
The professor suggested obtaining another set of samples, this time using a larger sample size and taking more
samples. They also make hourly checks on the production process and 5 boxes are selected. He had calculated
sample means and range values. The results are shown in the following table.
Sample Number
Mean
Range
Sample Number
Mean
Range
25.4
1.7
13
25.2
2.3
25.1
1.1
14
24.7
2.4
24.2
1.2
15
24.6
2.5
24
1.8
16
23.4
2.5
24.2
1.1
17
23.6
2.6
25.4
2.6
18
23.6
2.7
25.1
2.7
19
25.4
2.8
24
1.6
20
25.1
2.8
23.8
1.5
21
25.1
2.9
10
24.5
2.1
22
25.2
3.0
11
25.4
2.2
23
23.6
3.1
12
25.1
2.2
24
25.4
3.1
25
25.1
3.2
Managerial Report
Consider the following questions, and then write a brief report to Steele Breakfast Foods Inc. based on
the two samples.
1. How did you conclude that the process was not capable based on the first set of samples?
2. Does the second set of samples show anything that the first set didnt? Explain what and why.
3. Assuming the problem can be found and corrected, what impact do you think this would have on
the capability of the process?