Analytics Exercise 18-1 (Algo)

Starbucks has a large, global supply chain that must efficiently supply over 17,000 stores. Although the stores might appear to be very similar, they are actually very different. Depending on the location of the store, its size, and the profile of the customers served, Starbucks management configures the store offerings to take maximum advantage of the space available and customer preferences.

Starbucks actual distribution system is much more complex, but for the purpose of our exercise lets focus on a single item that is currently distributed through five distribution centers in the United States. Our item is a logo-branded coffeemaker that is sold at some of the larger retail stores. The coffeemaker has been a steady seller over the years due to its reliability and rugged construction. Starbucks does not consider this a seasonal product, but there is some variability in demand. Demand for the product over the past 13 weeks is shown in the following table. (week 1 is the week before week 1 in the table, 2 is two weeks before week 1, etc.).

Management would like you to experiment with some forecasting models to determine what should be used in a new system to be implemented. The new system is programmed to use one of two forecasting models: simple moving average or exponential smoothing.

WEEK	5	4	3	2	1	1	2	3	4	5	6	7	8	9	10	11	12	13
Atlanta	46	35	32	54	34	33	46	36	33	55	28	20	58	45	36	25	55	41
Boston	59	26	48	41	33	35	34	43	43	46	46	54	24	60	45	32	45	52
Chicago	55	22	68	42	44	46	33	25	52	47	69	65	30	24	96	35	44	47
Dallas	43	36	38	62	45	26	28	34	40	50	62	68	62	48	42	36	43	42
LA	44	41	52	42	37	35	40	45	45	47	66	42	35	39	42	46	53	49
Total	247	160	238	241	193	175	181	183	213	245	271	249	209	216	261	174	240	231

b. Evaluate the forecasts that would have been made over the 13 weeks using the overall (at the end of the 13 weeks) mean absolute deviation, mean absolute percent error, and tracking signal as criteria. (Negetlve values should be Indleated by a minus slgn. Round all answers to 2 declmel pleces. Enter "MAPE" answers as a percentege rounded to 2 declmal places.)