Reference no: EM133046934

Learning Outcome 1: Analyse inventory management issues, controls, practices, costs and data to contribute to decision making for the strategic and competitive advantage for the business individually and/or in a group.

Learning Outcome 2: Evaluate the relationship between stock levels and customer service alongside competitive advantages for businesses

Assignment Tasks:

Northcutt Bikes: The forecasting Problem

Jan Northcutt, the owner of Northcutt Bikes, started business in 1995. The following shows the monthly demand for one major product line: the standard 26-inch 10-speed street bike. Although it is only one of Jan's products, it is representative of most of the major product lines currently being produced by Northcutt Bikes. If Jan can find a way to use this data to understand her demand more constructively, she feels she can probably use the same methodologies to project demand for other major product families. Such knowledge can allow her to plan more effectively and continue to be responsive while still controlling costs.

Actual Demand

Period	Previous Year	Current Year
1	11155	12500
2	4593	5200
3	2866	3600
4	3095	4800
5	7487	6000
6	7580	8500
7	3221	4700
8	1947	3200
9	2104	3200
10	7184	7600
11	2968	3300
12	1845	2400
13	1994
14	5190
15	1845
16	2222
17	2400
18	8723
19	4489
20	2800
21	3026
22	5855
23	13118
24	5400

Assignment

1. Plot the data in Excel.

2. Discuss the pattern and justify how would you use this information to develop a forecast.

2. Use two different methodologies to develop as accurate a forecast as possible for the demand. Use each of those methods to project the next four months demand.

3. Compare the two chosen methods and justify which is better.

4. Calculate the recommended safety stock level for the business and justify the reasons behind.

5. Discuss the trade-offs between customer service level and stock level.

Attachment:- Case study briefing sheet.rar