Two years ago, Magic Mike Industries moved from just making basketballs to producing professional-grade basketball shoes. Magic Mike Industries makes three different models: the Dunk Master, the Jump King, and the Court Commander. As the names suggest, the last two models are designed to help players who struggle with either jumping high or maintaining grip and agility on the court. While Magic Mike Industries is pleased with the growing sales for all three models (see Table 1), the numbers present a dilemma for Mark Jordan, the production manager. Jordan knows that the current manufacturing work cell is capable of producing only 2,800 pairs of basketball shoes per month, and total sales seem to be rapidly approaching that number. Jordan's staff has told him it will take at least three months to plan for and implement an expanded work cell.

MONTH	Dunk Master	Jump King	Court Commander
Apr-21	1,433	402	366
May-21	1,440	406	367
Jun-21	1,457	412	369
Jul-21	1,475	416	372
Aug-21	1,489	421	373
Sep-21	1,506	425	375
Oct-21	1,513	428	377
Nov-21	1,528	434	380
Dec-21	1,544	437	382
Jan-22	1,559	445	386
Feb-22	1,570	448	388
Mar-22	1,577	451	390
Apr-22	1,585	456	392
May-22	1,597	462	394
Jun-22	1,610	466	398
Jul-22	1,618	470	400
Aug-22	1,636	479	404

MONTH	Dunk Master	Jump King	Court Commander
Sep-22	1,654	486	407
Oct-22	1,665	489	409
Nov-22	1,679	496	412
Dec-22	1,696	502	415
Jan-23	1,708	505	417
Feb-23	1,726	510	419
Mar-23	1,743	515	422

Table 1 - Sales for Three Models

Questions

1. Develop a quantitative forecast model for Jordan using the following techniques. (30 points)

1. 3-month moving average forecast
2. 4-month moving average forecast
3. Exponential smoothing forecast with ana of 0.5.

2. Which modeling technique did you choose, and why? What are the assumptions behind your model? (10 points)

3. According to your model, when will Magic Mike Industries need to have the expanded work cell up and running? What are the implications for when Jordan should start the expansion

effort? (10 points)

4. Now, suppose that over lunch, the marketing vice president says to Jordan:

"We're feeling a lot of heat from Chinese manufacturers who are offering very similar shoes to ours, but at significantly lower prices. The legal department is working on a patent infringement case, but if we can't block these shoes from entering the market, I expect to see our sales flatten, and maybe even fall, over the rest of the year."

What questions should Jordan ask? How would the answers to these questions affect the forecast? Does it still make sense to use quantitative forecasting under these circumstances? Why? (10 points)

5. After graduation, you take a position at Magic Mike Industries as Jordan's subordinate. One of your duties is to forecast monthly demand for the Court Commander basketball shoes.

1. Using the following data and THE MS Excel linear regression function, develop a regression model that expresses monthly sales as a function of the average Consumer Purchasing Power (CPP) index. (20 points)

MONTH	MONTHLY SALES	CPP
Mar-24	5,360	50
Apr-24	6,000	56
May-24	7,010	67
Jun-24	7,770	73
Jul-24	7,900	81
Aug-24	7,730	80
Sep-24	7,280	76
Oct-24	6,210	63
Nov-24	5,330	52
Dec-24	4,690	46
Jan-25	3,530	39
Feb-25	3,860	40

1. Draw the chart that shows the regression line. (10 points)

1. According to the chart, what type of relationship can be observed between the demand for shoes and the Consumer Purchasing Power? (5 points)

1. If the CPP is 58 for a particular month, how much sales can you expect for that month? (10 points)