Analytics Exercise 18-1 (Algo)

Starbucks has a large, global supply chain that must efficiently supply over 17,000 stores. Although the stores might appear to be very similar, they are actually very different. Depending on the location of the store, its size, and the profile of the customers served, Starbucks management configures the store offerings to take maximum advantage of the space available and customer preferences.

Starbucks' actual distribution system is much more complex, but for the purpose of our exercise let's focus on a single item that is currently distributed through five distribution centers in the United States. Our item is a logo-branded coffeemaker that is sold at some of the larger retail stores. The coffeemaker has been a steady seller over the years due to its reliability and rugged construction. Starbucks 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 is the week before week 1 in the table, 2 is two weeks before week 1, etc.).

Management would like you to experiment with some forecasting models to determine what should be used in a new system to be implemented. The new system is programmed to use one of two forecasting models: simple moving average or exponential smoothing.

WEEK	5	4	3	2	1	1	2	3	4	5	6	7	8	9	10	11	12	13
Atlanta	45	35	30	55	35	30	45	35	30	54	28	20	58	46	36	24	56	41
Boston	60	24	50	40	35	30	34	40	41	45	48	54	20	60	45	30	46	52
Chicago	62	23	71	43	45	45	33	23	53	48	72	64	27	25	96	34	45	47
Dallas	40	35	40	64	44	28	42	34	40	50	62	68	64	52	40	38	45	42
LA	44	42	52	45	36	34	42	50	44	46	72	40	34	44	38	48	55	48
Total	251	159	243	247	195	167	196	182	208	243	282	246	203	227	255	174	247	230

a. Consider using a simple moving average model. Experiment with models using five weeks' and three weeks' past data. (Round your answers to 2 decimal places.)

3-week MA

Week	ATL	BOS	CHI	DAL	LA	Total
1
2
3
4
5
6
7
8
9
10
11
12
13

5-week MA

Week	ATL	BOS	CHI	DAL	LA	Total
1
2
3
4
5
6
7
8
9
10
11
12
13

b. Evaluate the forecasts that would have been made over the 13 weeks using the overall (at the end of the 13 weeks) mean absolute deviation, mean absolute percent error, and tracking signal as criteria. (Negative values should be indicated by a minus sign. Round all answers to 2 decimal places. Enter "MAPE" answers as a percentage rounded to 2 decimal places.)

		ATL	BOS	CHI	DAL	LA	Average of DC's
3 week MA	MAD
	MAPE
	TS
5 week MA	MAD
	MAPE
	TS						(BLANK)