Our reading this week emphasizes the role of demand management in creating a coordinated flow of demand across the supply chain

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Our reading this week emphasizes the role of demand management in creating a

coordinated flow of demand across the supply chain. Experience shows that selecting

the best method of estimating demand will vary with the maturity of the business and

the data available.

Address the following:

a. A start-up alternative fuel automobile company has a first year market

forecast of 1000 units. Identify the forecasting model that is in use here and

explain why it is the obvious choice.

b. During its first three full years of operation the automobile company had

actual sales of:

i. Year One: 800 units

ii. Year Two: 1200 units

iii. Year Three: 2000 units

iv. Using a simple three year moving average, calculate the predicted

demand for Year Four.  Explain your reasoning.

 

c. The sales department expects the growth in Year Four to more closely

resemble the average growth experienced in the last two years. Predict the

number of units expected in Year Four. Discuss whether you would

recommend this quantity as the manufacturing plan or the quantity found

using the simple three year moving average in step two and why.

 

d. In Year Three, one fourth of the production was sold in China. The marketing

department has just learned of a new tax that will be imposed on all luxury

imports into China beginning in Year Four. It is expected that this will

decrease sales to China by 50%. Apply this market intelligence to the simple

three year moving average method discussed in step two and recalculate the

predicted demand for Year Four. Explain how you arrived at your answer.

 

The Alternative Fuel Company Case paper:

Must be four double-spaced pages in length (not including title and

references pages) and formatted according to APA style