Jim works as an analyst in a fast food delivery company. He was given data of weekly orders for Burger King and Swensen's in the East, Central and West of Singapore, and was asked to forecast the orders for the coming week. He decided to use a hierarchical method. After some analyses, the aggregate order forecast for the coming week is 200, and the order forecasts for Burger King and Swensen's are 60 and 160 respectively. The Burger King order forecast for the East, Central and West regions are 20, 30 and 10, respectively, and the Swensen's order forecast for the three regions (i.e., East, Central and West) are 40, 60 and 80, respectively.

(a) Draw a diagram (without reconciliation) with the forecasted values displaying the hierarchy levels as described above. (5 marks)

(b) Describe the top-down, middle-out, and bottom-up reconciliation methods. Construct one (1) model for each of these methods based on the forecast values used in your diagram from part (a). (9 marks)

(c) Discuss one (1) advantage of forecasting using hierarchies. Which reconciliation method is preferred? Justify your answer. (6 marks)