SCM202 Group-based Assignment
This assignment is worth 20% of the final mark for SCM202 Managing Operations.
Question 1
A regional distribution centre (DC) supplies consumer electronics accessories (e.g., chargers, cables, power banks) to over 120 retail outlets and online customers across three countries. Demand is reviewed weekly and replenishment decisions are based on short-term forecasts.
| Week | Actual Demand |
|---|---|
| 1 | 1623 |
| 2 | 1533 |
| 3 | 1455 |
| 4 | 1386 |
| 5 | 1209 |
| 6 | 1348 |
| 7 | 1591 |
| 8 | 1332 |
| 9 | 1245 |
| 10 | 1521 |
| 11 | 1421 |
| 12 | 1502 |
| 13 | 1656 |
| 14 | 1614 |
| 15 | 1332 |
(a) Apply the moving average model to determine the forecast demand for week 16.
What is the forecast for week 16, using a two-period and a three-period moving average?
Compute MSE for the two- and three-period moving average models and compare your results
(10 marks)
(b) Historically, demand for most SKUs has been stable with mild seasonality, and the DC relies on a statistical forecasting model using the past sales data. However, over the past six months, forecast accuracy has deteriorated. Several SKUs have experienced sudden demand spikes followed by sharp declines, resulting in simultaneous stockouts and excess inventory across different locations.
Design three (3) short survey questions you would ask staff from different functions (e.g., sales, operations, customer service). For each question, explain how the responses could be used to improve forecasting or planning decisions.
(18 marks)
(c) Recent data show higher demand volatility, but statistical tests give mixed results on whether this represents a structural shift or temporary noise. Discuss how this ambiguity should influence short-term and medium-term resource planning decisions (e.g., staffing, capacity buffers, overtime, outsourcing). Support your answer with operational reasoning rather than forecasting theory alone.
(12 marks)
Question 2
(a) Choose a real company with a broad product portfolio and geographically dispersed markets (e.g., consumer electronics, apparel, FMCG, pharmaceuticals).
Briefly describe the company’s product portfolio and demand characteristics, highlighting at least two distinct inventory profiles (e.g., high-volume vs. long-tail, seasonal vs. stable).
Using publicly available information, analyse how the company manages inventory across regions or product categories. Your analysis must reference specific operational practices or decisions, not generic inventory systems.
Propose one operational-level inventory change that could realistically improve performance, explicitly stating what trade-off it worsens and why this trade-off is acceptable.
Note: Generic descriptions of EOQ, JIT, or safety stock without clear linkage to the chosen company will receive minimal credit.
(30 marks)
(b) The ABC Card Shop sells calendars featuring a different Colonial picture for each month. The once-a-year order for each year’s calendar arrives in September. From experience, the September-to-July demand for the calendars can be approximated by a normal distribution with μ = 300 and standard deviation = 20. The calendars cost $6.50 each, and ABC Shop sells them for $15 each.
Suppose that the shop throws out all unsold calendars at the end of July. Using marginal economic analysis, how many calendars should be ordered?
[Hint: note that for a normal distribution, find the value of z that corresponds to the cumulative probability, and then find Q* by converting back to the original normal distribution using the formula z = (Q* – μ)/σ]
(10 marks)
—- End of Assignment —-
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