CASE #1 ALTAVOX ELECTRONICS Altavox is a manufacturer and distributor of many electronic instruments and

CASE #1 ALTAVOX ELECTRONICS

Altavox is a manufacturer and distributor of many electronic instruments and devices, including digital/analog multimeters, function generators, oscilloscopes, frequency counters and other test equipment and measuring equipment. Altavox sells a line of test meters that are popular with professional electricians. The model VC202 is sold through six distributors to retail stores in the United States. These distributors are located in Atlanta, Boston, Chicago, Dallas and Los angles and have been selected to serve different region in the country.

The Model VC202 has been a steady seller over the years due to its reliability and rugged construction. Altavox does not consider this a seasonal product, but there is some variability in demand. Demand for the product over the past 13 weeks is shown in the following table.

Week	1	2	3	4	5	6	7	8	9	10	11	12	13
Atlanta	33	45	37	38	55	30	18	58	47	37	23	55	40
Boston	26	35	41	40	46	48	55	18	62	44	30	45	50
Chicago	44	34	22	55	48	72	62	28	27	95	35	45	47
Dallas	27	42	35	40	51	64	70	65	55	43	38	47	42
Los Angles	32	43	54	40	46	74	40	35	45	38	48	56	50

The demand in the regions varies between a high of 40 units on average per week in Atlanta and 48 units in Dallas. This quarter’s data is pretty close to the demand last quarter.

Management would like you to experiment with various forecasting models to determine what should be used in a new system being implemented. The new system can be setup for any of the methods discussed in the book

In your analysis consider:

Analysis of the data for trends.

Overall and individual area demands.

Discussion of methods and results of each method evaluated.

What is the best forecasting model to use and why?

Place supporting data in an appendix.

Questions:

Consider using a simple moving average model. Experiment with models using five weeks and three weeks past data. The past data in each region is give below. Evaluate the forecasts that would have been made over the past 13 weeks using the mean absolute deviation and tracking signal as criteria.

Week	-5	-4	-3	-2	-1
Atlanta	45	38	30	58	37
Boston	62	18	48	40	35
Chicago	62	22	72	44	48
Dallas	42	35	40	64	43
Los Angles	43	40	54	46	35
Total	254	153	244	252	198

2. Next, consider using a simple exponential smoothing model. In your analysis, test two alpha values, .2 and .4. Use the same criteria for evaluating the model as in part 1. Assume that the initial previous forecast for the model using an alpha value of .2 is the past three-week average. For the model using an alpha of .4 assume that the previous forecast is the past five-week average.

Price: $14.16

Solution: The downloadable solution consists of 8 pages, 616 words and 2 charts.
Deliverable: Word Document