Respond to the following:
Review the Case-Altavox Electronics
1 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 given below (week -1 is the week before week 1 in the table, -2 is two weeks before week 1, etc.). Evaluate the forecasts that would have been made over the 13 weeks for each distributor using the mean absolute deviation, mean absolute percent error, and tracking signal as criteria.
|
WEEK
|
-5
|
-4
|
-3
|
-2
|
-I
|
|
Atlanta
|
45
|
38
|
30
|
58
|
37
|
|
Boston
|
62
|
18
|
48
|
40
|
35
|
|
Chicago
|
62
|
22
|
72
|
44
|
48
|
|
Dallas
|
42
|
35
|
40
|
64
|
43
|
|
LA
|
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 question 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.
3 Altavox is considering a new option for distributing the model VC202 where, instead of using five distributors, only a single distributor 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. 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?