CASE STUDY #$2$: FORECASTING COMPUTER SALES

AT THE UNIVERSITY BOOKSTORE

The bookstore at Tennessee Valley University is owned and operated by the university through an independent

corporation with its own board of directors. The bookstore has three locations on or near the university campus. It

stocks a range of items, including textbooks, trade books, logo apparel, drawing and educational supplies, and

computers and related products such as tablets, headsets, and software. The bookstore has a program to sell

laptop$/$notebook computers to incoming first$-$year students and other students at a substantial educational discount

partly passed on from computer manufacturers. This means that the bookstore just covers computer costs with a very

small profit margin remaining.

The university has new students starting each semester; however, the fall intake is the largest. Each summer all

incoming first$-$year students and their parents come to the university campus for a three$-$day orientation program. The

students come in groups of about $50$ throughout the summer. During their visit the students and their parents are given

details about the bookstore$$s computer purchase program. Some students place their computer orders for the fall

semester at this time, while others wait until later in the summer. The bookstore also receives orders from returning

students throughout the summer. This program presents a challenging supply chain management problem for the

bookstore.

Orders come in throughout the summer, many only a few weeks before school starts in the fall, and the computer

suppliers require at least four weeks for delivery. Thus, the bookstore must forecast computer demand to build up

inventory to meet student demand in the fall. The student computer program and the forecast of computer demand

have repercussions all along the bookstore supply chain. The bookstore has a warehouse near campus where it must

store all computers since it has no storage space at its retail locations. Ordering too many computers not only ties up

the bookstore$$s cash reserves, but also takes up limited storage space and limits inventories for other bookstore

products during the bookstore$$s busiest sales period. Since the bookstore has such a low profit margin on computers,

its bottom line depends on these other products. As competition for good students has increased, the university has

become very quality$-$conscious and insists that all university facilities provide exemplary student service, which for

the bookstore means meeting all student demands for computers when the fall semester starts. The number of

computers ordered also affects the number of temporary warehouse and bookstore workers that must be hired for

handling and assisting with computer setups and installations. The number of truck trips from the warehouse to the

bookstore each day of fall registration is also affected by computer sales.

The same process is repeated for the spring and summer semesters as well, although the volume of sales is much

smaller. The bookstore student computer purchase program has been in place since $2005.$ In this time, the student

population has grown, and the academic and economic profile of the students has shifted. Historical data on computer

sales have been collected; refer to the table on the following page $($spreadsheet available on Blackboard$).$

Assignment

Introduction and Summary $(20\%)$

Descriptive Statistics $(20\%)$: Based the Computer Sales dataset:

$1.$ Numerical Analysis: Develop a comprehensive descriptive statistics summary for the dataset's numerical

measurements. This should include, but is not limited to$,$ measures of central tendency $($mean$,$ median$)$ and

measures of dispersion $($range$,$ interquartile range, standard deviation$).$ Present your findings in a summary

table. Ensure that the table is well$-$organized and clearly annotated, making it easy to understand at a

glance.

$2.$ Categorical Analysis: Generate at least two visualizations focusing on the dataset's categorical variables.

You are encouraged to use bar charts, bubble charts, or other appropriate graphical representations to

illustrate your findings. For instance:

UMASS LOWELL

Manning School of Business POMS$\mathrm{.}2010$

$$ Display the distribution of order placement times to uncover any patterns in when students typically

place their orders. This might reveal specific periods of increased activity or preference for certain

times of the year.

$$ Illustrate the popularity of different computer models, considering variations in storage and RAM. This

could help identify the most sought$-$after configurations among students.

$3.$ Analysis Descriptions: Accompany each figure and table with a descriptive paragraph. This narrative

should:

$$ Explain the significance of the visualization or summary table, highlighting key takeaways.

$$ Discuss any notable patterns, trends, or anomalies observed in the data.

$$ Provide insights