Statistics - Forecasting Projects

Inventory Management Case Study Target Competencies Competency Analyze inventory management strategies.

Inventory Management Case Study

Target Competencies

Competency

Analyze inventory management strategies.

Directions

Read the Case Study, answer the questions, and write a case study summary.

Case study for LP 4B

Forecasting Sales, page 224.

	Criteria
1.	Identify the model/distribution used, and why it was chosen.
2.	Correctly identify all variables and formulas.
3.	Diagram/table/chart for question 1 is correctly set up and complete.
4.	Correctly chart/diagram an analysis of seasonality for question 2.
5.	Correctly chart/diagram a deseasonalized time series for question 2.
6.	Correctly identify the formula for the trend line fitted to the deseasonalized time series.
7.	Correctly chart the sales forecasts for question 3.
8.	Correctly compute the forecast error.
9.	Interpret the forecast error.
10.	Evaluate the solution, and write recommendations to the company

Case Study

The Vintage Restaurant is located on Captiva Island, a resort community near Fort Myers, Florida. The restaurant, which is owned and operated by Karen Payne, just completed its third year of operation. During this time, Karen saught to establish a reputation for the restaurant as a high-quality dining establishment that specializes in fresh seafood. The efforts made by Karen and her staff proved successful, and her restaurant is currently one of the best and fastest-growing restaurants on the island.

Karen concluded that, to plan better for the growth of the restaurant in the future, the needs to develop a system that will enable her to forecast food and beverage sales by month for up to one year in advance. Karen compiled the following data on total food and beverage sales for the three years of operation.

FOOD AND BEVERAGE SALES

FOR THE VINTAGE RESTAURANT ($1000s)

MONTH FIRST YEAR SECOND YEAR THIRD YEAR

January 242 263 282

February 235 238 255

MARCH 232 247 265

APRIL 178 193 205

MAY 184 193 210

JUNE 140 149 160

JULY 145 157 166

AUGUST 152 161 174

SEPTEMBER 110 122 126

OCTOBER 130 130 148

NOVEMBER 152 167 173

DECEMBER 206 230 235

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:

A graph of the time series.
An analysis of the seasonality of the data. Indicate the seasonal indexes for each month, and comment on the high seasonal and low seasonal sales months. Do the seasonal indexes make intuitive sense? Discuss.
Forecast sales for January through December of the fourth year.
Assume that January sales for the fourth year turned out to be $295,000. 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?
Recommendations as to when the system that you developed should be updated to account for new sales data that will occur.

Price: $14.69

Solution: The downloadable solution consists of 8 pages, 669 words and 1 charts.
Deliverable: Word Document