Question: Starbucks has a large, global supply chain that must efficiently supply over 34,000 stores. Although the stores might appear to be very similar, they are

Starbucks has a large, global supply chain that must efficiently supply over 34,000 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, let's 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.

WEEK5432112345678910111213
Atlanta453530553530453530542820584636245641
Boston602450403530344041454854206045304652
Chicago622371434545332353487264272596344547
Dallas403540644428423440506268645240384542
Los Angeles444252453634425044467240344438485548
Total251159243247195167196182208243282246203227255174247230

Consider using a simple exponential smoothing model. In your analysis, test two alpha values, 0.2 and 0.4. When using an alpha value of 0.2, assume that the forecast for week 1 is the past three-week average (the average demand for periods 3, 2, and 1). For the model using an alpha of 0.4, assume that the forecast for week 1 is the past five-week average.

Note: Round your answers to 2 decimal places.

ES, = 0.2. compute weeks 1-13 for atlanta, boston chicago dallas los angeles and total

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