Michael Heartbender never thought that his lightning move in the basketball court would give him a career,
Question:
Michael Heartbender never thought that his lightning move in the basketball court would give him a career, not in the NBA but as an entrepreneur. While in high school in Indianapolis also known as the Crossroads of America—he grew up watching ace basketball players such as Reggie Miller and player’s player—Larry Bird. As a high school senior, he won many awards and brought home the bacon—as they say-- to his high school in national championship. He was quickly recruited by Indiana University and got a full basketball scholarship to pursue his studies there. Michael contributed to many wins Hoosier scored against several mighty teams within the Big-10 and outside the Big-10 conferences. People thought that he will be an early recruit in NBA’s pick. Michael also had seen the dream of being a part of the NBA and, of course, the millionaire club. People would come to his home to congratulate him and shake hands with a future NBA player.
It was February, a month before the March madness, Michael took a pass from a fellow Hoosier and was charging to the finish line. He was victim to a flagrant foul. He fell on the court and was not able to lift his 6 ft. 4-inch body. He was carried off the court and the announcer announced that Michael has broken his shoulder joint and unlikely to come back to the court for the rest of the play. Although the Hoosiers did win, it was a bitter sweet experience for the team as they lost their best player. Michael’s and his parents’ dream also shattered when they learnt that Michael can never play again in competitive sports due to his shoulder. A lifelong dream to ‘move’ the ball with finesse as a NBA player never materialized.
He took a few supply chain and logistics class as part of his management degree. While completing a class project he stumbled on the idea of starting a moving company because of the locational advantage Indianapolis has, with several interstates I-65, I-70, I-74, I-69 passing through the city. He borrowed money from his parents and leased a truck and launched Hassle Free Moving, Inc. in 2001. The rest, as they say, is history. In this competitive market, Michael moved quickly because of his superior work ethics, honesty, sense of commitments, and unquestionable customer service.
The table overleaf will give you an idea that Michael has really carved a “millionaire” niche for himself. Of course, the real estate market bubble played havoc on Hassle Free Moving, Inc. The company has come back on its tracks and has been showing steady revenues growth. Michael now believes that the sky is his limit if he uses his business school background .
In order to fulfill his dreams, he has hired a consulting company, i.e., your group, and has provided the company (you) with the data for the past 6 years, 2014-2019. As you can see from the data, the financial year of Hassle Free comprises January--December.
Hassle Free’s management has asked your group (consulting company) to provide you the following as part of the management report.
(1) Introduction: Compare similar businesses worldwide and give an outlook of the “moving” market and future that awaits Hassle Free. (10 points)
(2) Analysis:
(a) Based upon Hassle Free’s data on next page, compute 4, 5, 6 quarter moving averages and find which moving average will be used if you have to forecast for Q1 (Jan.-March) of 2020. Make sure to provide your rationale by using the forecasting error calculation such as MAD, MSE, MAPE, and Tracking Signal. (15 points)
(b) If you have the option of using only the single exponential smoothing method to project for Q1 of 2020, which value of α will be appropriate based upon your calculation of MAD, MSE, MAPE?
(c) Calculate the forecast for the next 2 years (8 consecutive quarters) using the Classical Decomposition Method. If Hassle Free is contemplating investing $10m in buying trucks and other moving accessories, and would like to have the Payback period of this new investment as 2 years, do you think this threshold of Payback period can be met if Hassle Free Moving uses 2019 revenue as its baseline?
Please help me with 2C only! I very much don't understand how to organize and complete it.
Expert Answer:
1 Moving companies are a popular services industry worldwide typically providing services such as long distance and local moving packing and unpacking ... View the full answer
