Question: 2 0 . 1 3 . To generate some statistics you have averaged the forecasts and calculated the standard deviation for each school and in
To generate some statistics you have averaged the forecasts and calculated the standard deviation for each school and in total.
Based on advice from the market research firm, you have decided to use the aggregate demand forecast and standard deviation for the aggregate demand. The aggregate demand was calculated by adding the average forecast for each item. The aggregate standard deviation was calculated by squaring the standard deviation for each item this is the variance summing the variance for each item, and then taking the square root of this sum. This assumes that the demand for each school is independent, meaning that the demand for Ohio State is totally unrelated to the demand at Michigan and the other schools.
You will allocate your aggregate order to the ixtividual schools based on their expected percentage of total demand. You discussed your analysis with Rhonda and Steve and they are OK with your analysis. They would like to see what the order quantities would be if each school was considered individually.
How many sweaters should be ordered this year? Compute your answer for each individual school using two methods: based on overall aggregate demand which is then apportioned to each individual school based on its average forecast, based directly on average forecast for each individual school. Use the singleperiod inventory model approach as the basis for each method. Round your answers to the nearest whole number.
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