View the step-by-step solution to: Case study for Altavox 4 question. 1. Consider using simple

Case study for Altavox 4 question. 1....
This question was answered on Dec 21, 2011. View the Answer
Case study for Altavox 4 question.
1. Consider using simple moving average model. Experiment with models using five weeks' and three weeks' past data. The past data in each region is given in the tab "Moving Average Analysis," that also includes the 13 week data (table above) along with the past 5 weeks'. Evaluate the forecasts that would have been made over the past 13 weeks (week 1 to week 13) using the "mean absolute deviation" and "tracking signal " as criteria.
2. Next, consider using a simple exponential smoothing model. In your analysis, test two alpha values 0.2 and 0.4. 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 0.2 is the past three-week average. For the model using an alpha value of 0.4, assume that the previous forecast is the past five-week average.

Altavox is considering a new option for distributing the model VC 202 where, instead of using five vendors, only a single vendor would be used. Evaluate this option by analyzing how accurate the forecast would be based on the DEMAND AGGREGATED ACROSS ALL REGIONS. Use the model that you think is best from your analysis of questions 1 and 2. Use a new criterian that is calculated by taking the MAD and dividing by the average demand. This criterian is called the mean absolute percent error (MAPE) and gauges the error of a forecast as a percent of the average demand.

. What are the advantages and disadvantages of aggregating demand from a forecasting view? Are there other things that should be considered when going from multiple distributors to a single distributor.
Altavox_Electronics-forecasting-portfolio question-session 4_a(1).xlsx

CASE : ALTAVOX ELECTRONICS
Altavoxisamanufactureranddistributorofmanydifferentelectronicinstrumentsand
devices,includingdigital/analogmultimeters,functiongenerators,oscilloscopes,frequency
counters,andothertestandmeasuringequipment.Altavoxsellsalineoftestmetersthat
arepopularwithprofessionalelectricians.ThemodelVC202(seepicture)issoldthrough
SIXdistributorstoretailstoresintheUnitedstates.Thesedistributorsarelocatedin
Atlanta,Boston,Chicago,Dallas,andLosAngelesandhavebeenselectedtoservedifferent
regionsinthecountry.
ThemodelVC2o2hasbeenasteadysellerovertheyearsduetoitsreliabilityandrugged
construction.Altovaxdoesnotconsiderthisaseasonalproduct,butthereissome
variabilityindemand.Demandfortheproductoverthepast13weeksisshowninthetab
labeled"DemandData."
Managementwouldlikeyoutoexperimentwithsomebasicforecastingmodelsto
determinewhatshouldbeusedinanewsystembeingimplemented.Thenewsystemis
programmedtouseoneoftwomodels:simplemovingaverageorexponentialsmoothing.
Theanalysisquestionsarecontinuedinthe"DemandData"

Altavox Demand Data
Week
Atlanta
Boston
Chicago
Dallas
LA
Total

1
33
26
44
27
32
162

2
45
35
34
42
43
199

3
37
41
22
35
54
189

4
38
40
55
40
40
213

5
55
46
48
51
46
246

6
30
48
72
64
74
288

7
18
55
62
70
40
245

8
58
18
28
65
35
204

9
47
62
27
55
45
236

10
37
44
95
43
38
257

11
23
30
35
38
48
174

12
55
45
45
47
56
248

QUESTIONS (4)
Considerusingsimplemovingaveragemodel.Experimentwithmodelsusingfiveweeks'and
threeweeks'pastdata.Thepastdataineachregionisgiveninthetab"MovingAverageAnalysis,"
thatalsoincludesthe13weekdata(tableabove)alongwiththepast5weeks'.Evaluatethe
forecaststhatwouldhavebeenmadeoverthepast13weeks(week1toweek13)usingthe"mean
absolutedeviation"and"trackingsignal"ascriteria.
1.

Next,considerusingasimpleexponentialsmoothingmodel.Inyouranalysis,testtwoalpha
values0.2and0.4.Usethesamecriteriaforevaluatingthemodelasinpart1.Assumethatthe
initialpreviousforecastforthemodelusinganalphavalueof0.2isthepastthreeweekaverage.
Forthemodelusinganalphavalueof0.4,assumethatthepreviousforecastisthepastfiveweek
average.
2.

AltavoxisconsideringanewoptionfordistributingthemodelVC202where,insteadofusing
fivevendors,onlyasinglevendorwouldbeused.Evaluatethisoptionbyanalyzinghowaccurate
theforecastwouldbebasedontheDEMANDAGGREGATEDACROSSALLREGIONS.Usethemodel
thatyouthinkisbestfromyouranalysisofquestions1and2.Useanewcriterianthatiscalculated
bytakingtheMADanddividingbytheaveragedemand.Thiscriterianiscalledthemeanabsolute
percenterror(MAPE)andgaugestheerrorofaforecastasapercentoftheaveragedemand.
3.

Whataretheadvantagesanddisadvantagesofaggregatingdemandfromaforecastingview?Are
thereotherthingsthatshouldbeconsideredwhengoingfrommultipledistributorstoasingle
distributor.
4.

13 Average
40
40
50
42
47
47
42
48
50
46
229
222

Altavox Moving Average Analysis
Week
Atlanta
Boston
Chicago
Dallas
LA
Total

-5
45
62
62
42
43
254

-4
38
18
22
35
40
153

-3
30
48
72
40
54
244

-2
58
40
44
64
46
252

-1
37
35
48
43
35
198

1
33
26
44
27
32
162

2
45
35
34
42
43
199

3
37
41
22
35
54
189

4
38
40
55
40
40
213

5
55
46
48
51
46
246

6
30
48
72
64
74
288

7
18
55
62
70
40
245

8
58
18
28
65
35
204

9
47
62
27
55
45
236

10
37
44
95
43
38
257

11
23
30
35
38
48
174

12
55
45
45
47
56
248

13
40
50
47
42
50
229

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Dear Student Please find attached solution of your assignment. Regards View the full answer

Other Subjects- 7780392.xls

SOLUTION:
WEEK

DEMAND

1
2
3
4
5
6
7
8
9
10
11
12
13
Average Demand

162
199
189
213
246
288
245
204
236
257
174
248
229
222

WEEK

DEMAND

3
4
5
6
7
8
9
10
11
12
13

189
213
246
288
245
204
236...

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