Case Study II: Product Sales
TJ's, Inc., makes three nut mixes for sale to grocery chains located in the Southeast. The three mixes are referred to as the Regular Mix, the Deluxe Mix, and the Holiday Mix. Sales of the Deluxe Mix have steadily increased over the last three years, as have the number of grocery store chains that carry the Deluxe Mix.
After the demanding fall season last year, TJ's has decided to better plan for future sales. In preparation for next year's sales, TJ's has collected the following historical sales data:
|
Year
|
Quarter
|
Number of Grocery Chains
|
Deluxe Mix Sales (1,000 Pounds)
|
|
2013
|
1
|
1
|
6.4
|
|
|
2
|
2
|
7.0
|
|
|
3
|
2
|
7.2
|
|
|
4
|
3
|
7.8
|
|
2014
|
1
|
4
|
8.0
|
|
|
2
|
5
|
8.2
|
|
|
3
|
6
|
8.4
|
|
|
4
|
7
|
8.8
|
|
2015
|
1
|
7
|
9.0
|
|
|
2
|
7
|
9.3
|
|
|
3
|
11
|
9.5
|
|
|
4
|
12
|
10.6
|
The Customer Service sales team has determined that TJ's will continue to grow their presence in the Southeast. Due to the growing market presence of the Deluxe Mix, it is expected that the product will appear in several new grocery chains next year.
Perform an analysis of TJ's product sales and prepare a report for TJ's president that summarizes your findings:
1. You will be required to use two quantitative forecasting methods.
a. Method I: Use the time-series data to forecast sales for Quarters 1-4 of 2016.
b. Method II: TJ's was just informed that a few major grocery chains may suspend sales of the Deluxe Mix in the 4th quarter in order to make room for the Holiday Mix. TJ's had assumed continued growth of the Deluxe Mix but will now have to create an alternative plan, considering that the product may only appear in 10 grocery chains in the last quarter of the year. How does this information change the forecast for Deluxe Mix sales in the 4th quarter?
2. In your writing assignment, you are taking the position as the forecast analyst for TJ's, Inc. Write the report in a memo style format summarizing all of the essential information, results, and recommendations. The memo should be about two pages long, single-spaced.
TJ's Inc.Memo
To: Recipeint's Name, President
From: Your Name, Forecast Analyst
cc: [Name]
Date: [Click to select date]
Re: Case Study II Guidelines
This writing assignment must be typed in a memo format using 12 point font and be single- spaced. Proper writing mechanics (e.g., grammar, sentence structure, etc.), organization, and content are expected for all assignments. Consider the audience to be the appropriate decision-making group at the company in which the case is set.
The case will be graded as follows:
I. Statement of facts and problem Describe the following:
• Selection of quantitative model(s)
II. Results narrative
Include information and interpretation of the following:
• Model I
1. Model formulation
2. Include the forecasts for Q1, Q2, Q3, Q4
3. Model Error (MSE)
• Model II
1. Model formulation
2. Q4 forecast
3. Model Error (MSE)
III. Conclusions and recommendations
Using your results, provide information on the following:
• How does the change in the number of grocery stores carrying the Deluxe Mix affect the sales forecast for the 4th quarter?
• What strategy and/or recommendations would you provide TJ's?
IV. Finally, the raw data and all computer printouts should be included as appendices.